Madras High Court

S. Kaleeswaran vs V. Malaravan on 21 July, 2025

                                                                                   Crl.A(MD)No.313 of 2014

                     BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

                                              DATED: 21.07.2025

                                                       CORAM:

                                  THE HON'BLE DR.JUSTICE R.N.MANJULA

                                           Crl.A(MD)No.313 of 2014

                    S. Kaleeswaran
                                                                                             ... Petitioner
                                                            Vs

                    V. Malaravan
                                                                                           ... Respondent
                    Prayer: This Criminal Appeal Case filed under Section 374 of Cr.P.C to
                    set aside the Judgment passed in STC No.634 of 2012 on the file of the
                    Judicial Magistrate No.I, Fast Track Court (Magistrate Level), Madurai,
                    dated 04.09.2014 and convict the respondent.

                                         For Appellant          :         Mr. R.Parthiban

                                         For Respondent :                 Mr.V.Nagendiran


                                                    JUDGMENT

The present Criminal Appeal has been filed challenging the

Judgment of the learned Judicial Magistrate No.I, Fast Track Court

(Magistrate Level), Madurai, dated 04.09.2014 made in STC No.634 of

2012.

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2.The appellant is the complainant, who had filed a private

complaint against the respondent for the offence under Section 138 of

Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') on

the allegation that the respondent along with his brother borrowed a loan

of Rs. 3,70,000/- for producing a feature film from the complainant and

his wife on 04.10.2004. The accused and his brother agreed to pay

interest @ 24% per annum in respect of the above transaction. The

accused along with his brother executed a promissory note in favour of

the complainant and his wife on 04.10.2004 itself, but the loan was not

repaid as agreed. On 09.11.2006, both the accused and his brother had

given undertaking letters that they would pay the loan amount of Rs.

3,70,000/- along with the interest amount of Rs. 1,11,350/-. On

executing an undertaking on 09.11.2006, they got back the promissory

note. On 10.05.2008, the respondent alone had executed another

undertaking letter. Even thereafter, the respondent did not repay the loan

amount. Later, he gave a cheque drawn from his banker IDBI Bank, KK

Nagar, Madurai on 14.08.2008 for Rs.4,00,000/- towards part payment

of the outstanding payable by him. When the cheque was presented for

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collection on 21.08.2008, it was returned for the reason 'funds

insufficient' on 24.08.2008.

3.After completing the legal mandates, sending statutory

notice and exhausting the statutory wait period, the defacto complainant

has filed the complaint. After trial, the trial Court found the accused not

guilty and aggrieved over that, this appeal has been preferred by the

complainant.

4.The learned counsel for the appellant submitted that the

trial Court has not drawn initial presumption in favour of the

complainant as contemplated under Section 139 of NI Act; the Court had

dealt the case on a wrong presumption that the complainant has got

burden to prove the offence beyond reasonable doubts irrespective of

rebuttal of initial presumption; the accused, who was examined as D.W.

1, has admitted in his cross-examination that a civil case has been filed

in OS No. 142 of 2008, on the file of 1 st Additional District Court,

Madurai with regard to the above transaction and a decree has been

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obtained; He further admitted that he has not repaid the amount even as

per the civil Court decree and taken the same defence before the civil

Court that the issuance of the cheque is only for security purpose; the

civil Court has believed the letter of undertaking acknowledgement

given by the accused. However, the criminal Court has dealt its

evidentiary value once again and held not proved.

5.The learned counsel for the respondent submitted that the

trial Court has rightly given a finding that the cheque was not given for

any enforceable debt or liability, as the complainant has not proved the

same. If the cheque is not given for any legally enforceable debt, the

Court has no other option except to dismiss the complaint. The trial

Court has rightly done the same.

6.I have given my anxious consideration to the submissions

made on either side and carefully perused the records.

7.On perusal of the Judgment of the learned trial judge, it is

seen that the trial Court has appreciated the correctness of filing of

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complaint under Section 138 of NI Act after fulfilling the legal mandates

of issuing statutory notice and wait period. Thereafter, the trial Court has

predominantly dealt with about the reliability of the letter of

undertaking.

8.The fact remains that the accused did not dispute the

signature in the impugned cheque. In such case, the Court ought to have

granted the benefit of initial presumption in favour of the complainant

and presumed that cheque has been issued for legally enforceable debt.

Only when the accused could rebut the initial presumption by proving

the contrary, the presumption can be broken.

9.To rebut the initial presumption, it is not necessary that

the accused should always give direct evidence. He can also lean upon

the infirmities or inadequacies in the evidence of the complainant.

10.In the instant case, the accused had examined himself as

DW1 and has stated that the cheque was not issued for legally

enforceable debt. But in the cross-examination, he has admitted that a

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civil case has been filed on the basis of the undertaking given by him.

On that basis, civil Court decree has been passed. When decree itself is

passed by the civil Court on the basis of undertaking given by the

accused, the trial Court shall not doubt on the genuineness or veracity of

the undertaking. DW1 has further stated in his cross-examination that

he had taken the very same stand before the civil Court that the

documents have been given as a security, but that was not accepted by

the civil Court. Even after the civil Court decree, he did not repay the

decree amount.

11.It is not the contention of the defacto complainant that

the transaction believed before the civil Court is a different transaction

involved in the promissory note. It appears that the defacto complainant

had exhausted the civil Court remedy and on the strength of the

promissory note issued for discharge of the alleged loan amount availed

by the respondent, he has also filed a criminal case under Section 138 of

NI Act.

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12.As the initial loan availed by the accused has not been

paid and that has culminated into a civil Court decree, there need not be

any doubt in the mind of the learned Magistrate about the liability of the

respondent. Once the signature is accepted and the liability also proved

on the strength of the civil Court decree, then the trial Court ought to

have allowed the initial presumption to be transformed into a conclusive

proof without appreciating the evidence and in the absence of any

rebuttal proof, the learned trial judge has chosen to dismiss the

complaint and thereby, acquit the accused.

13.In this regard, it is worthwhile to refer the decision of

this Court in J.Franklin Vs S.Gunalan in Crl.R.C.No.343 of 2016 cited

by the learned counsel for the appellant in support of his contention

about the benefit of initial presumption in favour of the complainant,

wherein, it is held that:

“12. The learned counsel for the petitioner submitted that there are contradictions in the evidence of the

complainant/PW1 and Velusamy/PW2, who is said to be the

witness for pro-note executed by the accused. The learned

counsel for the petitioner drew the attention of the Court to the

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variation of time of giving the loan in the evidence of PW1 and

PW2. It is to be noted that this is not a case for recovery of

money based on promissory note. This case is filed under

Section 138 of Negotiable Instruments Act. Hence, it is

sufficient to see whether the fundamental facts are proved. Since

the revision petitioner admitted the execution of the cheque, the

respondent/complainant is entitled to get the initial

presumption. The reverse burden is only on the revision

petitioner/accused to disprove the same by producing any

contrary evidence. Despite the revision petitioner/accused had

refuted the allegations of the complainant no rebuttal proof is

produced.

13. The only defence side witness before the Court is

DW1. He is none other than the Manager of the Indian

Overseas Bank, where the accused held an account. But, the

documents which are marked as Exs.D1 to D4 through DW1 are

not in anyway connected to the case of the complainant. The

revision petitioner/accused has not taken any steps to prove that

the complainant did not have the financial capacity to lend him

a loan of Rs.3,50,000/-. The complainant’s account was also not

called for to prove anything contrary to the case of the

complainant and to substantiate the contention of the accused

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that the impugned cheque was not supported by consideration.

With a mere self-assertive evidence of the accused, it cannot be

taken that the preponderance of probability had shifted in

favour of the revision petitioner / accused.

14. The learned trial Judge as well as the learned

Appellate Judge have appreciated the facts and applied the

position of law and found the accused guilty for the offence

under Section 138 of the Negotiable Instruments Act. Hence, I

do not find any reason for interference.”

14.In respect of the validity of the civil Court decree, when

there is a conflict of decision between civil and criminal jurisdiction, the

Hon'ble Supreme Court has held in Prem Raj Vs Ponnamma Menon

and Ors, reported in 2024 INSC 260 that criminal jurisdiction would be

bound by the civil Court finding. In this regard, the relevant portion is

extracted hereunder:

“11. The position as per Premshanker (supra) is that

sentence and damages would be excluded from the conflict of

decisions in civil and criminal jurisdictions of the Courts.

Therefore, in the present case, considering that the Court in

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criminal jurisdiction has imposed both sentence and damages, the

ratio of the above-referred decision dictates that the Court in

criminal jurisdiction would be bound by the civil Court having

declared the cheque, the subject matter of dispute, to be only for

the purposes of security.

12. In that view of the matter, the criminal proceedings

resulting from the cheque being returned unrealised due to the

closure of the account would be unsustainable in law and,

therefore, are to be quashed and set aside. Resultantly, the damages

as imposed by the Courts below must be returned to the appellant

herein forthwith.”

15.In view of the above discussions, I feel that the matter

needs to be remanded back to the trial Court to redo the exercise in light

of the above Judgment.

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16.Accordingly,

● this Criminal Appeal is allowed;

● the judgment of acquittal passed by the learned Judicial

Magistrate No.I, Fast Track Court (Magistrate Level),

Madurai in STC No.634 of 2012, dated 04.09.2014 is set

aside;

● the matter is remitted back to the file of Judicial

Magistrate No.I, Fast Track Court (Magistrate Level),