Madras High Court
Kumarasamy vs M/S.Ara Investments & Finance ... on 26 June, 2023
Crl.R.C(MD)Nos.70 and 72 of 2019
BEFORE THE MADURAI BENGH OF MADRAS HIGH COURT
DATED : 26.06.2023
CORAM
THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN
Crl.R.C(MD)Nos.70 and 72 of 2019
and
Crl.M.P.(MD)Nos.1497, 1498, 1511 and 1512 of 2019
Crl.R.C.(MD)No.70 of 2019
Kumarasamy ... Petitioner/Appellant/Respondent
Vs.
M/s.ARA Investments & Finance Private Ltd.,
Rep. by its Director,
N.Vellaiyan, A-16,
Main Road, 11th Cross,
Thillai Nagar, Trichy-18
... Respondent/Respondent/Complainant
PRAYER: Criminal Revision Case filed under Sections 397 and 401 of
the Code of Criminal Procedure, to call for the records pertaining to the
order issued by the I – Additional District and Sessions Judge, Trichy, in
C.A.No.48 of 2007, dated 20.12.2018, by confirming the order of
conviction sentence passed by the Judicial Magistrate No.IV, Trichy, in
C.C.No.38 of 2009, dated 21.03.2007 and to set aside the same.
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Crl.R.C(MD)Nos.70 and 72 of 2019
Crl.R.C.(MD)No.70 of 2019
Kumarasamy ... Petitioner/Appellant/Respondent
Vs.
M/s.ARA Investments & Finance Privat Ltd.,
Rep. by its Director,
N.Vellaiyan, A-16, Main Road, 11th Cross,
Thillai Nagar, Trichy-18
... Respondent/Respondent/Complainant
PRAYER: Criminal Revision Case filed under Sections 397 and 401 of
the Code of Criminal Procedure, to call for the records pertaining to the
order issued by the I – Additional District and Sessions Judge, Trichy, in
C.A.No.47 of 2007, dated 20.12.2018, by confirming the order of
conviction sentence passed by the Judicial Magistrate No.IV, Trichy, in
C.C.No.37 of 2009, dated 21.03.2007 and to set aside the same.
(In both Crl.R.C.)
For Petitioner : Mr.G.Karuppasamy Pandian
for Ms.R.Yamuna
For Respondent : Mr.M.Subash Babu, Senior Counsel
for Mr.L.Siva
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Crl.R.C(MD)Nos.70 and 72 of 2019
COMMON ORDER
These Criminal Revision Petitions have been filed to set
aside the Judgment passed by the I – Additional District and Sessions
Judge, Trichy, in C.A.Nos.47 and 48 of 2007, dated 20.12.2018, by
confirming the order of conviction and sentence passed by the Judicial
Magistrate No.IV, Trichy, in C.C.Nos.37 and 38 of 2009, dated
21.03.2007.
2. The petitioner in both the revisions is the accused. The
complaint was lodged by the respondent for the offence under Section
138 of the N.I Act.
3.The crux of the complaint is that the respondent is doing
business in Finance. The petitioner is a Chartered Accountant and he
used to borrow money for the purpose of his business in Real Estate.
Accordingly, from 06.03.1996 till 18.03.2000, on various dates, the
petitioner had borrowed a sum of Rs.1,11,50,000/- and he agreed to pay
interest at the rate of 24% per annum. As agreed by him, the petitioner
paid interest till 18.03.2000 and thereafter, he failed to pay neither
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Crl.R.C(MD)Nos.70 and 72 of 2019
interest nor principal account. In fact, while borrowing the loan, the
petitioner executed a promissory note to deposit title deeds and also
created mortgage by depositing title deeds in respect of the properties.
While being so, on 20.12.2001, the respondent demanded for repayment
and the petitioner issued two cheques for a sum of Rs.10,00,000/- and
Rs.5,00,000/- respectively. The cheques were presented for collection,
which were returned as “insufficient funds”. After issuance of statutory
notice, the respondent initiated proceedings under Section 138 of
the N.I. Act.
4. On the side of the respondent, he had examined himself as
P.W.1 to P.W.3 and exhibited 20 documents as Ex.P.1 to Ex.P.20. On the
side of the petitioner, 2 witnesses were examined as D.W.1 and D.W.2
and exhibited 18 documents as Ex.D1 to D18.
5. On perusal of the oral and documentary evidence, the trial
Court found the petitioner guilty for the offence under Section 138 of the
N.I Act and sentenced him to undergo one year Simple Imprisonment in
both the cases in C.C.Nos.37 and 38 of 2002. Aggrieved by the same, the
petitioner preferred appeals in C.A.Nos.47 and 48 of 2007 on the file of
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Crl.R.C(MD)Nos.70 and 72 of 2019
the I – Additional District and Sessions Judge, Trichy and the Appellate
Court confirmed the conviction and dismissed the Appeals, against
which, the petitioner / accused had filed these petitions.
6.The learned counsel for the petitioner would submit that
the alleged cheques were issued as security, at the time of borrowal of
loan. In fact the cheques are printed form and the year is mentioned as
1990. It means that the cheques of the year 19th Century, which was
issued for security purpose. It was not issued for any legally enforcable
debt. Even according to the respondent, the petitioner allegedly
borrowed loan from 06.03.1996 till 18.03.2000 to the tune of Rs.
1,11,50,000/-, at the time of borrowal of loan, the petitioner had executed
pronote, confirmation letter and deposit of title deeds as security purpose.
The petitioner also executed cheques without mentioning the date for a
sum of Rs.10,00,000/- and Rs.5,00,000/-. Both the cheques related to the
borrowal, dated 16.03.1996 and 21.03.1996. Therefore, even assuming
that both the cheques were issued for the said borrowal, both were time
barred and as such, the cheques were not issued for legally enforceable
debt. He would further submit that both the cheques were not filled with
any date. It was of the year 19th Century and it has been filled up by the
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Crl.R.C(MD)Nos.70 and 72 of 2019
respondent and was presented for collection. As per Ex.D.16, the total
transaction between the petitioner and the respondent was only to the
tune of Rs.64,13,408/- not to the tune of Rs.1,11,50,000/-. Though the
respondent stated the total borrowal to the tune of Rs.1,11,50,000/-, it
was substantiated by the respondent by any documents. Therefore, both
the cheques were issued only for security purpose and not for any legally
enforceable debt. In support of this contention, he also relied upon the
Judgment of this Court in Crl.R.C.No.339 of 2011, in the case of V.Jothi
Ramalingam V. Gunaseka, dated 07.03.2019, in which, this Court held
that the blank cheques signed by one of the mortgagees cannot be
construed to be issued to the complainant, permitted to be filled up and
make it valid document under Section 20 of the N.I. Act. When the
enforceable debt itself is questioned by the accused and probablised his
defence presumption under Section 139 of the N.I. Act. Therefore,
fixing the criminal liability based on the cheques in possession of the
complainant cannot be safe.
7. Per contra, the learned Senior Counsel for the respondent
would submit that the petitioner himself categorically admitted the entire
borrowal of loan. In fact,the petitioner had taken three defence before the
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Crl.R.C(MD)Nos.70 and 72 of 2019
trial Court, viz., (i) that the petitioner categorically admits the borrowal
between the petitioner and the respondent (ii) that the petitioner
completed the transaction even in the year 1996 itself and thereafter, he
never borrowed any amount (iii) the petitioner issued the cheques, which
were issued only for security purpose and not for any legal enforceable
debt. He would further submit that though even assuming that cheques
were issued for security purpose on the date of presentation of cheques,
there was debt from the petitioner and as such, it can be very well filled
up by the complainant to release the balance amount. He also related
upon the judgment in support of his contention, High Court of Kerala at
Ernakulam, in the case of Ashok Kumar V. Sankarakutty Pillai
(RFA.No.390 of 2003).
8. He also relied upon the another judgment of this Court
reported in 2023-1-LW(crl.)-15 in the case of R.Tamilarasa V.
T.P.Rameshkumar, with regard to barred by limitation gets reversed.
The relevant paragraph, which reads as follows:-
“19. Though, the petitioner issued reply notice
which was marked as Ex.P6, he failed to whisper
anything about the payment stopped by him and
about his defence. He simply denied the allegation
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Crl.R.C(MD)Nos.70 and 72 of 2019
and issued reply notice. In support of his
contention, he failed to examine any witness and
failed to produce any material evidence to that
effect. In so far as, the source of income is
concerned, the petitioner failed to rebut the same
by probable defence.”
9. Heard the learned counsel on either side and also perused
the documents available on record.
10. The petitioner is the accused in the complaint lodged by
the respondent for the offence punishable under Section 138 of the
N.I.Act. A perusal of the complaint revealed that the petitioner borrowed
a sum of Rs.1,11,50,000/- from 06.03.1996 till 18.03.2000. He agreed to
pay interest at the rate of 24% per annum and he had so far paid interest
only till 18.03.2000 and thereafter, he failed to pay any interest and also
the principal amount. On repeated demands, the petitioner issued two
cheques for a sum of Rs.10,00,000/- and Rs.5,00,000/-. Both the cheques
were presented for collection and were returned for the reason
“insufficient funds” and after causing statutory notice, the respondent
filed the complaints. Statutory notices were marked as Ex.P7 and Ex.P9
respectively. On receipt of the same, the petitioner issued reply notices,
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Crl.R.C(MD)Nos.70 and 72 of 2019
which were marked as Ex.P9 and Ex.P11 respectively. On perusal of
Ex.P9 and Ex.P11 revealed that the cheques were issued for security
purpose and not for any legal enforceable debt. Cheques were marked as
Ex.P4 and Ex.P6, which were issued for a sum of Rs.5,00,000/- and Rs.
10,00,000/- respectively signed by the petitioner and filled up by the
petitioner, except the date of the cheques. Though it was printed as 19th
Century, it meant to said that for 19th Century, it was filled up by the
respondent as 03.12.2001. A perusal of the complaint revealed that the
said cheques were issued for the transaction, dated 02.09.2009, on which
date, the petitioner borrowed a sum of Rs.9,43,200/-. In order to repay
the said amount, the cheques were issued by the petitioner. It is also
evident from the deposition of P.W.1, that on 30.04.1999, the petitioner
borrowed a sum of Rs.6,45,000/- and he also executed pronote on the
date of borrowal. That apart, the petitioner issued confirmation letters,
which were marked as Ex.P3 and P.5, the pronote-Ex.P4. Further, he
deposed that on 02.09.1999, he borrowed another sum of Rs.9,43,200/-
on the same date, he executed pronote, which was marked as Ex.P6. On
the same date, he also issued confirmation letter, which was marked as
Ex.P5. In order to repay the amount in those transaction, issued two
cheques for a sum of Rs.10,00,000/- and Rs.5,00,000/-. Though the
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Crl.R.C(MD)Nos.70 and 72 of 2019
petitioner had taken specific stand that both the cheques were issued only
for security purpose, the petitioner failed to substantiate the same by any
probable defence. Both the cheques were issued for the said transaction,
dated 30.04.1999 and 02.09.1999. Therefore, it cannot be said both the
cheques issued were barred by limitation. Therefore, the judgments cited
by the learned counsel for the petitioner are not helpful to the case on
hand.
11. Further, the learned counsel for the petitioner
categorically deposed that he is a Law Graduate and also he completed
F.C.A and is practicing as a Chartered Accountant. He borrowed money
on various dates from the respondent from the year 1983 to 1996. He
completed all the loan transactions and after 01.04.1996, he did not
borrow any amount, whereas, his reply and other statement revealed that
he borrowed loan only from 16.03.1996 till 18.03.2000. Even assuming
that the cheques were issued for security purpose at the time of
presentation of cheques, there was legally enforceable debt and as such,
the presentation of cheques are valid document, under Section 25
of the N.I. Act.
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Crl.R.C(MD)Nos.70 and 72 of 2019
12. Both the cheques were filled with date by the
respondent. His specific stand taken by the petitioner is that both the
cheques were issued for security purpose and as such, he could not have
been presented for the legally enforceable debt. It is very frank that the
cheques were issued as security purpose and that in the event of non
payment security is to be enforceable debt. Cheques even for security
purpose would amount to enforcable debt on presentation when payment
is due. Therefore, the petitioner failed to rebut the presumption as
contemplated under Sections 118 and 139 of the N.I Act. Hence, both
the Courts below rightly convicted the petitioner under Section 138 of
the N.I Act. Hence, this Court finds no infirmity or illegality in the
Judgment of conviction and sentence imposed by the Courts below and
the revisions are liable to be dismissed.
13. Accordingly, these Criminal Revision Cases are
dismissed.
14. However, the learned counsel for the petitioner would
submit that if the petitioner settled the cheque amount, sentence may be
set aside.
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Crl.R.C(MD)Nos.70 and 72 of 2019
15. Considering the said request made by the learned
counsel for the petitioner, if the petitioner deposits the entire cheque
amount to the credit of C.C.Nos.37 and 38 of 2009 on the file of the
Judicial Magistrate No.IV, Trichy, on or before 21.08.2023, the sentence
alone imposed by the Courts below are hereby set aside. On such deposit
being made, the respondent-complainant is permitted to withdraw the
same. Consequently, connected miscellaneous petitions are closed.
26.06.2023
NCC : Yes/No
Index : Yes/No
Internet : Yes
Ls
Note : Issue order copy on 27.06.2023
To
1.The Judicial Magistrate No.IV,
Trichy
2.The I – Additional District and Sessions Judge,
Trichy.
3.The Section Officer,
Criminal Section,
Madurai Bench of Madras High Court,
Madurai.
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Crl.R.C(MD)Nos.70 and 72 of 2019
https://www.mhc.tn.gov.in/judis
Crl.R.C(MD)Nos.70 and 72 of 2019
G.K.ILANTHIRAIYAN, J.
Ls
Order made in
Crl.R.C(MD)Nos.70 and 72 of 2019
and
Crl.M.P.(MD)Nos.1934 and 3479 of 2018
26.06.2023
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