Bama vs Angammal
2023 Latest Caselaw 3803 Mad

                                                                                   Crl.A(MD)No.273 of 2012



                       BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

                                                       Date : 05.04.2023

                                                          CORAM:

                           THE HONOURABLE MR.JUSTICE G.K.ILANTHIRAIYAN

                                                Crl.A.(MD)No.273 of 2012

                     Bama                                             ... Appellant/Complainant

                                                                vs.

                     Angammal                                              ...Respondent/Accused

                     PRAYER : This Criminal Appeal has been filed under Section 378(4)
                     Cr.P.C., to set aside the Judgment and Acquittal order passed by the
                     learned Judicial Magistrate No.II (FTC), Nagercoil, dated 20.09.2012 in
                     C.C.No.39 of 2012 and convict the accused for the offence under Section
                     138 of N.I. Act.


                                       For Appellant     : Mr.S.Vashik Ali

                                       For Respondent : Mr.C.Christopher


                                                           JUDGMENT

This Criminal Appeal is directed against the Judgment and

Acquittal order passed by the learned Judicial Magistrate No.II (FTC),

Nagercoil, dated 20.09.2012 in C.C.No.39 of 2012 and to convict the

accused for the offence under Section 138 of N.I. Act.

https://www.mhc.tn.gov.in/judis

Crl.A(MD)No.273 of 2012

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

accused. The appellant lodged a complaint alleging that the respondent

borrowed a sum of Rs.3,50,000/- on 25.04.2009 and assured that she will

repay the said amount within a period of 2 ½ years. In order to repay the

said amount, the respondent/accused issued cheque for the said sum and

the same was presented for collection on 22.07.2009. It was returned and

dishonored for the reason that “funds insufficient”. Therefore, the

appellant sent statutory notice on 30.07.2009. It was duly received by the

respondent on 03.08.2009. However, there was some mistake in the said

notice and as such, the appellant again had sent corrected notice on

07.09.2009 and the same was duly received by the respondent on

09.09.2009. On receipt of the said notice, the respondent requested the

appellant for one month to honour the cheque. On instruction, again the

appellant presented the cheque for collection on 28.10.2009. However,

again it was returned for the reason “funds insufficient”. Therefore, the

appellant sent statutory notice on 09.11.2009 and the same was duly

received by the respondent on 11.11.2009. In fact, the respondent has

also sent a reply notice on 19.11.2009. Hence, the complaint.

https://www.mhc.tn.gov.in/judis

Crl.A(MD)No.273 of 2012

3.On behalf of the appellant, she had examined herself as P.W.1

and marked Ex.P.1 to Ex.P.11. On the side of the respondent, she had

examined herself as D.W.1 and marked Ex.D.1 to Ex.D.3.

4.On perusal of the oral and documentary evidence, the trial Court

found the respondent not guilty and acquitted her for the offence under

Section 138 of Negotiable Instruments Act. Challenging the said order of

acquittal, the appellant has filed the present appeal.

5.The learned counsel for the appellant/complainant would submit

that the only ground on which, the trial Court acquitted the respondent is

that for filing the complaint, there was no cause of action. Since on the

first time the appellant presented the cheque for collection, the same was

returned dishonored. On the said return, the appellant already sent

statutory notice on 30.07.2009. However, the appellant has failed to file a

complaint on the said cause of action. The presentation of complaint for

the offence under Section 138 of N.I Act had not been second cause of

action. Hence, the trial Court had dismissed the complaint. He would

further submit that the other grounds stated by the trial Court are flimsy

ground and the appellant categorically proved her case and as such, the https://www.mhc.tn.gov.in/judis

Crl.A(MD)No.273 of 2012

trial Court ought to have punished the respondent for the offence under

Section 138 of N.I Act. That apart, the respondent categorically admitted

that the signature and also issuance of cheque. Therefore, the appellant

had discharged her initial burden and when the respondent failed to rebut

the presumption, she has to be convicted. In support of his contention, he

also relied upon the Judgments of the Hon'ble Supreme Court as well as

the High Court of Madras in MSR Leathers Vs. S.Palaniappan and

Another reported in (2013) 1 SCC 177 and in A.Palanisamy Vs.

R.Murugesan reported in 2011 (3) MWN (Cr.) 149 (DCC).

6.Per contra, the learned counsel for the respondent would submit

that the appellant had no cause of action to lodge the very same

complaint itself for the offence under Section 138 of N.I Act. Even

according to the appellant, the first statutory notice was sent on

30.07.2009 and the same was duly received by the respondent on

03.08.2009. Further the corrected notice was also sent by the appellant

and the same was also received on 09.09.2009. Therefore, she initiated

proceedings under Section 138 of N.I Act only on the statutory notice

dated 30.07.2009. Therefore, for lodgment of the present impugned

complaint, there was absolutely no cause of action. He would further

submit that the appellant has also failed to discharge her initial burden as https://www.mhc.tn.gov.in/judis

Crl.A(MD)No.273 of 2012

contemplated under Section 138 of N.I Act, since the place of borrowal

and the reason for borrowal were also not stated in the notice or in the

complaint. By the reply notice, the respondent/accused categorically

denied the borrowal and the alleged cheque was not issued for legally

enforceable debt. Further, the respondent borrowed only a sum of

Rs.10,000/-, for which, she had also return the entire money along with

interest. Unfortunately, the cheque was issued for the purpose of security

and even after repayment of the entire loan, it was not returned to the

respondent. The said cheque was misused by the appellant and initiated

proceedings under Section 138 of N.I Act. Therefore, the Court below

has rightly dismissed the complaint and acquitted the respondent.

7.Heard the learned counsel on either side and perused the

materials available on record.

8.The trial Court had dismissed the complaint and acquitted the

respondent only on the ground that there was no cause of action for filing

the complaint, since the first statutory notice was issued by the appellant

on 30.07.2009 and the same was duly received by the respondent on

03.08.2009. Subsequently, the erratum was also sent by the appellant on

07.09.2009 and the same was also duly received by the respondent on https://www.mhc.tn.gov.in/judis

Crl.A(MD)No.273 of 2012

09.09.2009. On receipt of the same, the respondent requested the

appellant to present the same one month later and she has also assured

that time, the cheque will be honoured. As assurance given by the

respondent and on instructions, the appellant once again presented the

cheque for collection and the same was also returned and dishonored for

the very same reason, namely, “funds insufficient”. Therefore, the

appellant sent notice on 09.11.2009 and the same was also duly received

by the respondent on 11.11.2009. In fact, on receipt of the said notice, the

respondent sent reply notice on 19.11.2009. The reply notice was

marked as Ex.P.11. Perusal of Ex.P.11 revealed that the respondent never

stated that the second notice was not permissible, since there was no

second presentation of cheque. As per the guidelines of Reserve Bank of

India, Ex.P.1 was valid for six months before the amendment. During the

validity period of six months, any number of time it can be presented for

collection. Therefore, the appellant presented the cheque for collection

and the second time that too, on instructions given by the respondent.

The second time also, it was returned and dishonored for the very same

reason. Further, the second notice was caused on the second presentation

of the cheque and after dishonor of the cheque. Therefore, it is not the

case that for one presentation, there was second notice. If for one

presentation caused second notice, the second notice does not create any https://www.mhc.tn.gov.in/judis

Crl.A(MD)No.273 of 2012

cause of action. The first notice only is valid and beyond the limitation

period and second notice is not the cause of action to lodge complaint.

9.In this regard, the learned counsel for the appellant relied upon

the Judgment of the Hon'ble Supreme Court of India in MSR Leathers

Vs. S.Palaniappan and Another reported in (2013) 1 SCC 177, wherein,

it had been held that neither Section 138 nor Section 142 or any other

provision contained in the N.I Act forbids the holder or payee of the

cheque from presenting the cheque for encashment on any number of

occasions within a period of six months of its issue or within the period

of its validity, whichever is earlier. The proviso to Section 138 is all

important and stipulates three distinct conditions precedent which must

be satisfied before the dishonor of a cheque can constitute an offence and

become punishable. The first condition is that the cheque ought to have

been presented to the bank within a period of six months from the date

on which it is drawn or within the period of its validity, whichever is

earlier. The second condition is that the payee or the holder in the due

course of the cheque, as the case may be, ought to make a demand for the

payment of the said amount of money by giving a notice in writing, to the

drawer of the cheque, within thirty days of the receipt of information by

him from the bank regarding the return of the cheque as unpaid. The third https://www.mhc.tn.gov.in/judis

Crl.A(MD)No.273 of 2012

condition is that the drawer of such a cheque should have failed to make

payment of the said amount of money to the payee or as the case may be,

to the holder in due course of the cheque within fifteen days of the

receipt of the said notice. It is only upon the satisfaction of all the three

conditions mentioned and enumerated under the proviso to Section 138

thereof that an offence under Section 138 can be said to have been

committed by the person issuing the cheque. Therefore, the appellant

caused second statutory notice on the second time presentation of the

cheque. It is not the case that the appellant caused second statutory notice

on the first time presentation of the cheque. Therefore, the appellant

discharged her initial burden as contemplated under Section 138 of N.I

Act.

10.Further, the case of the respondent is that she borrowed only

Rs.10,000/- from the appellant and even after repayment of the entire

loan, the appellant failed to return the cheque, it was given as security.

However, the respondent did not even cause any notice and did not even

take any steps to recover Ex.P.1 from the custody of the appellant herein.

She also did not deny the signature and did not deny the issuance of

cheque in favour of the appellant herein. Once the issuance of cheque has

not been disputed, the holder of the cheque is entitled to invoke the https://www.mhc.tn.gov.in/judis

Crl.A(MD)No.273 of 2012

presumption under Sections 118 and 138 of N.I Act. The respondent has

failed to deny the signature and issuance of cheque even at the time of

making statement under Section 313 of Cr.P.C. Therefore, the appellant

proved her case to punish the respondent for the offence under Section

138 of N.I Act beyond any doubt. Hence, the order of acquittal cannot be

sustained and it is liable to be set aside.

11.Accordingly, the order of acquittal passed by the learned

Judicial Magistrate No.II (FTC), Nagercoil, dated 20.09.2012 in C.C.No.

39 of 2012 is set aside and the respondent is convicted for the offence

under Section 138 of N.I Act. Hence, this Criminal Appeal is allowed.

12.In order to question about the sentence for the offence under

Section 138 of N.I Act, the respondent shall be present in person before

this Court on 19.04.2023. Issue notice to the respondent/accused for her

appearance on 19.04.2023 for hearing on the question of sentence.

05.04.2023

sji Note: Issue order copy on 10.04.2023.

NCC : Yes/No Index: Yes/No Internet: Yes/No https://www.mhc.tn.gov.in/judis

Crl.A(MD)No.273 of 2012

G.K.ILANTHIRAIYAN , J.

sji

To

1.The Judicial Magistrate No.II (FTC), Nagercoil.

2.The Section Officer, VR Section, Madurai Bench of Madras High Court, Madurai.

3.The Additional Public Prosecutor, Madurai Bench of Madras High Court, Madurai.

Crl.A.(MD)No.273 of 2012

05.04.2023

https://www.mhc.tn.gov.in/judis