Madras High Court
M. Nagaraj vs M/S. Jr Housing Developers Pvt Ltd on 2 June, 2025
Author: Sathi Kumar Sukumara Kurup
Bench: Sathi Kumar Sukumara Kurup
Crl.A.No.564 of 2012
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 02-06-2025
CORAM :
THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP
Criminal Appeal No. 564 of 2012
---
M. Nagaraj .. Appellant
Versus
1. M/s. JR Housing Developers Pvt Ltd
2. S.Jagadeeswara Reddy
Managing Director
M/s. JR Housing Developers Pvt Ltd
Having Office at No.71, 2nd floor,
RJ Garden, Outer Ring Road,
Maratha Halli,
Bangalore – 560 037. .. Respondents
Criminal Appeal is filed under Section 378 (4) of the Criminal
Procedure Code against the Judgment of acquittal dated 27.06.2012 passed in
S.T.C. No. 25 of 2011 on the file of the learned Judicial Magistrate, Fast
Track Court at Hosur for the offence under 138 of the Negotiable Instruments
Act.
For Appellant : Mr. R. Jayaprakash
For R1 and R2 : Mr. D. Vivekanandan
for Mr. S. Vijayaraghavan Associates
1/26
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Crl.A.No.564 of 2012
JUDGMENT
This Criminal Appeal had been filed against the order of acquittal dated
27.06.2012 passed in S.T.C. No. 25 of 2011 on the file of the learned Judicial
Magistrate, Fast Track Court at Hosur for the offence under 138 of the
Negotiable Instruments Act.
2. The brief facts, which are relevant for consideration of this
Criminal Appeal, are as follows:
2.1. The Complainant - Nagaraj is the father-in-law of Ramaiah. The
dispute between the Complainant and the Accused is with regard to the sale of
the property belonging to one Narasimhaiah, father of Ramaiah, a resident of
Chimandahalli village, Jadigenahalli, Hosur. He owns a property to an extent
of 2 acres 17 guntas which is his ancestral property. After the death of
Narasimhaiah, the property devolved on his sons, Ramaiah, Narayanasamy
and Srinivasan.
2.2. During the life time of Narasimhaiah, he entered into sale
agreement with JR Housing Developers Private Limited Company, Accused-1.
Accused-2 is Jagadeeswara Reddy, Managing Director of M/s. JR Housing
Developers Private Limited. The Complainant/Nagaraj is the Power of
Attorney Agent of Narasimhaiah. After his death, he was the Power of
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Attorney agent to the legal heirs of Narasimhaiah. Nagaraj claims that he, as
Power of Attorney Agent, spent Rs.16,00,000/- for developing the agricultural
lands into housing plots. He also claims to have entered into sale agreement
with the Accused. In the course of the business transactions, the Accused had
issued a cheque for Rs.8,00,000/- to the Complainant. While entering into sale
agreement, it was agreed that 30% of the gain to be shared with the
Complainant/Nagaraj and 70% with the legal heirs of Narasimhaiah. The
Accused-2 in S.T.C. No. 25 of 2011 claimed that he is running a firm by name
Shivapriya Developers and he had already entered into developing
arrangements with Narasimhaiah during his lifetime. Subsequent to the death
of Narasimhaiah in the year 2002, the second Accused in this case had entered
into a settlement with Nagaraj by which a confirmation deed was executed. In
the confirmation deed, the Complainant/Nagaraj agreed to help the Accused to
sell the lands for which he will get the signatures of all the legal heirs of
Narasimhaiah. On such promise, Rs.8,00,000/- was issued by way of cheque
by the Accused. In the confirmation deed, the Complainant/Nagaraj had
affixed his signature. When the Complainant presented the cheque for
Rs.8,00,000/- issued by second Accused in his bank on 22.01.2011, the
Accused had issued notice to his Bank to stop payment directing his Bank not
to issue money on presentation of the cheque. Therefore, the cheque presented
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by the Complainant/Nagaraj was returned with an endorsement “payment
stopped by the drawer”. The attempt of the Complainant to contact the
Accused-2 regarding the instructions given by him to his bank to stop payment
could not be fructified. Therefore, the Complainant issued statutory notice
directing him to settle the amount failing which he will be forced to file a
complaint under Section 138 of the Negotiable Instruments Act. On receipt of
the notice, the Accused had denied the contention of the Complainant in the
statutory notice stating that the cheque was issued only to bring the legal heirs
of late Narasimhaiah to affix their signatures in the confirmation deed towards
settlement of the dispute between the Complainant and the Accused-2 in
developing the lands into house plots and sale of the same. Since the Accused
disputed the claim of the Complainant, the Complainant was forced to file a
case under Section 138 of Negotiable Instruments Act.
2.3. The learned Judicial Magistrate, Fast Track Court (Magisterial
Level), Hosur recorded the sworn statement of the Complainant and perused
the documents filed along with the complaint. On being satisfied about the
prima facie case made out by the Complainant, the complaint under Section
138 of the Negotiable Instruments Act was taken cognizance by the learned
Judicial Magistrate, Fast Track Court (Magisterial level), Hosur. Thereafter,
summons were issued to the Accused-1 and 2 under section 204 of Cr.P.C
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along with copies of the complaint.
2.4. On appearance of the Accused and having furnished with copies
of the complaint, the Accused was questioned regarding the offence committed
under section 138 of the Negotiable Instruments Act, 1881. After completion
of the Complainant evidence as P.W-1, the incriminating evidence available
against him under Section 313(b) Cr.P.C were put to the Accused. The
Accused denied the incriminating evidence. The Accused denied the charge
under Section 138 of the Negotiable Instruments Act and claimed to be tried.
Therefore, trial was ordered. In the trial, the Complainant examined himself
as P.W-1 and marked six documents as Ex.P-1 to Ex.P-6. Ex.P-1 is the Power
of Attorney deed, Ex.P-2 is the copy of the plaint in O.S.No.138 of 2007.
Ex.P-3 is the cheque issued by the Accused bearing Cheque No.137135 dated
04.01.2011. Ex.P-4 is the return memo from the bank. Ex.P-5 is the legal
notice issued on behalf of the Complainant to the Accused. Ex.P-6 is the reply
notice on behalf of the Accused. The Accused-2 Jagadeeswara Reddy had
examined himself as D.W-1. On behalf of the Accused, 19 documents were
marked as Ex.D-1 to Ex.D-19. Ex.D-1 is the confirmation deed dated
03.01.2011. Ex.D-2 is the certified copy of the plaint in O.S.No.138 of 2007.
Ex.D-3 is the Conversion order. Ex.D-4 is the settlement agreement. Ex.D-5 is
also settlement agreement. Ex.D-6 is the original voucher dated 30.10.2010.
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Ex.D-6 to Ex.D-17 are original vouchers regarding payment of money to
various parties to the dispute by the Accused. Ex.A-18 is the notice on behalf
of the Accused to his bank to stop payment. Ex.D-19 is the statement of the
account of the Accused which reflects that sufficient amount was available in
his Bank account to honor the amount of Rs.8,00,000/- issued as cheque to the
Complainant.
2.5. After completion of the defense witnesses, after hearing the
arguments of the learned Counsel for the Complainant and the Accused, the
learned Judicial Magistrate, Fast Track Court (Magisterial level), Hosur on
assessment of evidence arrived at a conclusion that the ingredients of offence
of Section 138 of Negotiable Instruments Act, 1881 are not attracted in this
case and therefore, dismissed the complaint of the Complainant and acquitted
the Accused.
2.6. Aggrieved by the same, the Complainant had preferred this
Appeal seeking to set aside the judgment of acquittal and to convict the
Accused for the offence under 138 of Negotiable Instruments Act, 1881.
3. It is the contention of the learned Counsel for the Appellant that
the issuance of the cheque and the signature of the Accused are admitted. Also
the learned Counsel for the Appellant invited the attention of this Court to the
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deposition of D.W-1. It is the submission of the learned Counsel for the
Complainant that the lands belonging to one Narasimhaiah in S.No.47/1,
Chimandahalli village, Jadigenahalli, was laid out for development of plots by
the sister concern of Respondent Company. Narasimhaiah died in the year
2002. Despite the death of the Principal, the Respondents herein executed the
layout. Late Narasimhaiah had three sons namely Ramaiah, Narayanasamy and
Srinivasan. The three sons had executed Power of Attorney deed in favour of
the Appellant. Further, the learned Counsel for the Appellant invited the
attention of this Court to the statutory notice under Ex.P-5 issued on behalf of
the Complainant to the Accused and the reply notice of the Accused under
Ex.P-6. The defense of the Accused is that on condition that the
Appellant/Complainant shall bring all the sons of Narasimhaiah to affix their
signatures in the confirmation deed, the cheque was issued for Rs.8 lakhs.
4. The learned Counsel for the Appellant invited the attention of this
Court to the confirmation deed under Ex.D-1 as well as the settlement
agreement dated 30.10.2010 under Ex.D-4 entered into between the
Complainant/Nagaraj, as Power of Attorney holder on behalf of the sons of
late Narasimhaiah, namely Ramaiah, Narayanasamy and Srinivas, and the
Respondent-2 Jagadeeswara Reddy. The party of the first part are the legal
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heirs of the late Narasimhaiah through their Power Agent Nagaraj the
Complainant herein. The Party of the 2nd part is the Respondent-2 herein
Jagadeeswara Reddy. The settlement agreement is with regard to the suit filed
in O.S. No. 138 of 2007 on the file of the learned Principal Civil Judge, Junior
Division, Hoskote, in respect of the land in S.No.145, New No. 145/1
measuring to an extent of one acre 17 guntas out of 2 acres 17 guntas, situated
at Jinnagara village, Jadigenahalli Hobli, Hoskote Taluk, wherein it is stated as
follows:-
“ ...upon the advice and intervention of well wishers and common
friends the Parties of the first part and the Second Party have
decided to amicably settle the dispute that arose between the parties
in the above referred disputes.
Whereas the parties of the first part do hereby declare that
S.No.145 New No.145/1 measuring 1 acre 17 guntas out of 2 acre 17
guntas originally belonged to Sri.Narasimhaiah, the father of the
Parties of the first part. The said Narasimhaiah during his life time
had developed the said property with the aid of the Second party
herein by putting him in possession of said lands and after forming
layout thereon by obtaining necessary permission from concerned
authorities, had sold the same for valuable consideration to
prospective buyers.
Now in order to put an end to untold miseries and above
referred disputes, the parties of the first part represented by their
GPA Holder Sri.Nagaraj and the second party have arrived at a
settlement that the second party has agreed to pay a sum of
Rs.30,00,000/- (Rupees Thirty Lakhs only) to the parties of the first
part and the first party has agreed to receive the same and to resolve
the disputes amicably. In pursuance of the foregoing, the second
party has this day paid a sum of Rs.2,00,000/- (Rupees two lakhs
only) to the first party GPA Holder, Nagaraj as an advance by way of
cheque bearing No.698225 dated 30.10.2010 drawn on Indus
Indusind Bank, Marathahalli Baranch, Bangalore. And it is agreed
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upon between the parties herein that the Parties of the first part shall
take back all the allegations made against the second party in
O.S.No.138/2007 and shall report settlement before the Hon'ble
Principal Civil Judge, (Jr Dn) Hoskote on receipt of remaining sum
agreed herein.
By this settlement, the Parties of the first part have declared
that they had/have no manner of right title, possession, interest
whatsoever at any point of time over the subject matter of above
referred suit i.e., S.No.145, New No. 145/1 measuring 1 acre 17
guntas out of 2 acre 17 guntas of Jinnagara village, Jadigenhalli
Hobli, Hoskote Taluk and late Narasimhaiah, the father of the parties
of first party had developed the land in S.No.145 with the aid of
second party and sold the sites formed declare that the sale
transactions made by late Narasimhaiah either by himself or through
his agents are binding on them and they have no claims whatsoever
over the said property and they have no objections or impediment for
the second party and the prospective buyers to continue in
possession of the said property. The parties of the first part have
undertaken not to cause any interference or obstruction to the
peaceful possession and enjoyment of the second party and buyers of
sites formed on Survey No.145.
The Parties of the first party duly represented by his GPA
holder Sri Nagaraj have consented to be present and to report
settlement before the Hon'ble Principal Civil Judge, (Jr. Dn) Hoskote
along with legal heirs of Narasimhaiah and to execute and register
documents before the Sub registrar and other authorities as
prescribed and demanded by the second party in terms of above
settlement on the day fixed by the parties herein.”
5. It is the contention of the learned Counsel for the Appellant that
the suit in O.S. No. 138 of 2007 was filed by Nagaraj against Jagadeeswara
Reddy for a bare injunction. The learned Judicial Magistrate, Fast Track Court
while considering the complaint under Section 138 of The Negotiable
Instruments Act, 1881 had observed that there was no consideration passed on
to the Accused and therefore, the defense of the Accused is accepted and
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erroneously acquitted the Accused.
6. The learned Counsel for the Appellant invited the attention of this
Court to page 7 of the judgment of the learned Judicial Magistrate. It is the
contention of the learned Counsel for the Appellant that the learned Judge had
observed that on demand of the Complainant, a cheque was issued under the
promise that he will bring all the legal heirs of the Narasimhaiah to affix their
signature on the confirmation deed. As per the promise of the Complainant, he
had not brought all the legal heirs of the deceased Narasimhaiah to affix their
signatures on the confirmation deed on realising that on the date mentioned
viz., 04.01.2011 they had not affixed their signatures on the confirmation
deed, the Accused had issued notice dated 05.01.2011 to the Manager State
Bank of Hyderabad, Maratha Halli Branch Bengaluru to stop payment. Also,
the learned Judge had observed that the Accused had in the course of evidence
stated that he is ready to pay the amount even on the date of his evidence
before the learned Judicial Magistrate, Fast Track Court (Magisterial level), if
the Complainant is ready to bring all the legal heirs to affix their signatures on
the confirmation deed. On such consideration, the learned Judicial Magistrate
had dismissed the complaint on the ground that there was no prior liability to
issue cheque on behalf of the Accused to the Complainant. The learned
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Judicial Magistrate had observed that the ingredients of offence under Section
138 of the Negotiable Instruments Act, 1881 was not at all attracted. It was
only a promise and an offer made by the Accused. When the offer made by
the Accused was not honoured by the Complainant, on realising the same, the
Accused issued stop payment notice to his Bank viz., State Bank of
Hyderabad, Maratha Halli Branch, Bengaluru. Also the learned Judicial
Magistrate had observed that the Accused had not established the case that he
developed the lands of Narasimhaiah, by spending Rs.16,00,000/-. No
document was produced by the Accused in support of his defense before the
learned Judicial Magistrate, Fast Track Court (Magisterial level), Hosur. The
learned Counsel for the Appellant also invited the attention of this Court to the
evidence of Defendant-2 as D.W-1 particularly to the cross examination of
D.W-1. The fact that Nagaraj filed a suit for bare injunction before the Civil
Judge, Hoskote was admitted by the Accused-2 as D.W-1. The fact that
Nagaraj was the Power of Attorney agent of the sons of late Narasimhaiah
namely Ramasamy, Narayanasamy and Srinivasan was also admitted by him.
The fact that the sons of late Narasimhaiah did not sign the deed was claimed
by D.W-1 in his cross examination. The Voucher in favour of Nagaraj was not
cancelled was admitted by him in cross examination. The relevant portion of
cross-examination of D.W-1 is extracted as under:
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““fhnrhiy vz; 137137 U:/3 ,yl;rk; Ugha;
k";Rehj; bgaUf;F bfhLj;J mjpy; gzk;
jug;gl;Ls;sJ vd;why; rupjhd;/ mJ mtUf;F fkpc&dhf
bfhLf;fg;gl;l bjhifahFk;/ me;j 2 fhnrhiya[k;
3/1/2011 njjpapl;lJ vd;why; rupjhd;/ k";Rehj;Jf;F
bfhLj;j fhnrhiy vz;Zf;F Kd;g[s;s 2 fhnrhiyfs;
jhd; tHf;F fhnrhiyfsh vd;W vdf;F "hgfkpy;iy/
k";Rsh bgaUf;F eh';fs; U:/13 yl;rk; g';fhf
bfhLf;f xg;g[f;bfhz;L mjd; mog;gilapy; jhd;
k";Rsh bgaUf;F U:/2yl;rk; kw;Wk; k";Rehj;Jf;F U:.3
yl;rk; U:gha[k; tHf;F fhnrhiyfs; U:/8 yl;rk; nru;j;J
eh';fs; bfhLj;njhk; vd;why; rupay;y/ ehd; jhd;
k";Rehj;jplk; tHf;F jhf;fy; bra;a[khW brhy;ypl;L
mtUf;F bjupahky; gzk; brYj;j ntz;lhk; vd;W
mwptpg;g[ bfhLj;njd; vd;why; rupay;y/ mjdhy; jhd;
k";Rehj; me;j njjpapy; tHf;F nghlhky; fhye;jhH;j;jp
tHf;F nghl;lhu; vd;why; rupay;y/ k";Rsh jug;gpy;
cupa Mtz';fs; midj;Jk; mtu;fs; Vw;gLj;jp
bfhLj;J tpl;ljhy; mtu;fSf;Fz;lhd gzk; brYj;j
ehd; flikgl;ltu; vd;why; rupay;y/ uhikaht[k; mtuJ
2 kfd;fSk; ifbahg;gk; nghlhjjhy; me;j
fhuzj;jpw;fhf ntz;o ehd; me;j fhnrhiyfis gzk;
brYj;jhky; epWj;jp itj;jpUf;fpnwd; vd;why; rupay;y/
nkYk; ehfuh$%f;F U:/16yl;rk; gzk; bfhLg;gjhf
xg;g[f;bfhz;nld; vd;why; rupay;y/ nkYk; ehuhazrhkp
kw;Wk; rPdpthrd; cWjpg;gj;jpuj;jpy; ifbahg;gk;
bra;tjw;fhf ehd; me;j U:/8 yl;rk; bfhLj;njd;
vd;why; rupay;y/ nkYk; ehfuh$%f;F U:/16 yl;rk; gzk;
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bfhLg;gjhf xg;g[f;bfhz;nld; vd;why; rupay;y/ nkYk;
ehuhazrhkp kw;Wk; rPdpthrd; cWjpg;gj;jpuj;jpy;
ifbahg;gk; bra;tjw;fhf ehd; me;j U:8 yl;rk;
bfhLj;njd; vd;why; rupay;y/ nkYk; U:8 yl;rk;
uhikah thupRfs; ifbahg;gk; nghl;lgpwF jhd;
bfhLg;ngd; vd;W brhd;dhy; rupay;y/ ehfuh$;
Xg;g[f;bfhz;lgo Mtz';fspy; ifbahg;gk; bra;tjhy;
mtUf;F fhnrhiyg;go gzk; nru ntz;Lk; vd;why;
rupay;y/ ehfuh$%f;F bfhLj;j fhnrhiyfspd; njjp
4/1/2011 jhd; mJ eurpk;ikahtpDila thupRfSf;fhf
ntz;o ehfuh$%Rf;F bfhLf;fg;gl;ljhFk;/ eurpk;ikah
thupRfSf;fhfj;jhd; ehfuh$%rf;F gzk;
bfhLf;fg;gl;lJ/ jdpahf Mtz';fs; vJt[k;
vGjtpy;iy/ tha;bkhHpahfj;jhd; ngrg;gl;lJ/ nkYk;
ehd; brhy;ypj;jhd; ehfuh$; 4/1/2011 gjpyhf 22/1/2011y;
tR{Yf;F jhf;fy; bra;jhu; vd;why; rupay;y/ nkYk;
mjpfhuk; bgw;w egu; vd;w tifapYk; cWjp
bkhHpg;gj;jpuj;jpy; rhl;rpak; bra;jhu; vd;w KiwapYk;
cupikapay; tHf;fpy; mtu; kw;w egu;fSf;fhf bra;j
tHf;F bryt[fSf;Fj;jhd; ehd; me;j fhnrhiy
bfhLj;njd; vd;why; rupay;y/”
7. From the suggestion put to the Accused, it is found that the
Accused had issued stop payment after making the Complainant believe to
settle the case in which Nagaraj had obtained a decree in his favour on behalf
of the Principal, the sons of Narasimhaiah. Thereby the Accused had
contradicted himself by what he had stated in his reply notice. The learned
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Judge failed to consider the suggestions put to D.W-1 in cross-examination
and therefore, the judgment of acquittal recorded by the learned Judicial
Magistrate, Fast Track Court (Magisterial level), Hosur is perverse and is to be
set aside.
8. The learned Counsel for the Appellant invited the attention of this
Court to the reported decision in the case of Lafarge Aggregates and
Concrete India Pvt Ltd vs. Sukarsh Azad and another reported in (2014) 13
Supreme Court Cases 779 wherein it is held as follows:-
“8. The object of bringing Sections 138 to 142 of the
Negotiable Instruments Act on statue appears to be to inculcate faith
in the efficacy of banking operations and credibility in transactions
business of negotiable instruments. Despite several remedies,
Section 138 of the Act is intended to prevent dishonesty on the part of
the drawer of negotiable instrument to draw a cheque without
sufficient funds in his account maintained by him in a bank and
induces the payee or holder in due course to act upon it. Therefore,
once a cheque is drawn by a person of an account maintained by him
for payment of any amount or discharge of liability or debt or is
returned by a bank with endorsement like (i) refer to drawer, (ii)
exceeds arrangements, and (iii) instruction for stop payment and like
other usual endorsement, it amounts to dishonour within the meaning
of sections 138 of the Act. Therefore, even after issuance of notice if
the payee or holder does not make the payment within the stipulated
period, the statutory presumption would be of dishonest intention
exposing to criminal liability.”
9. The learned Counsel for the Appellant also invited the attention
of this Court to the judgment in Criminal Appeal No.456 of 2012, dated
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24.06.2016 [Manjunath vs. M/s. JR Housing Developers Pvt Ltd., Rep by its
Managing Director S.Jagadeeswara Reddy] wherein the brother of the
Complainant also preferred an Appeal against the very same Accused and the
same was amicably settled out of Court. Thus, it is submitted that the cheque
was issued towards a legally enforceable debt. The Accused failed to honour
the cheque and thereby violated the provisions of Section 138 of The
Negotiable Instruments Act, 1881. While so, the Judgment of acquittal passed
by the Trial Court is erroneous and it is liable to be set aside.
10. Per contra, the learned Counsel for the Respondents invited the
attention of this Court to the averments in the complaint, the evidence of the
Complainant as P.W-1 particularly, cross-examination of P.W-1 and the
evidence of D.W-1. According to the learned Counsel for the Respondents, the
reply notice under Ex.P-6 itself proved the preponderance of Probabilities by
the Accused. Therefore, the learned Judicial Magistrate (Magisterial level),
Hosur on proper assessment of evidence arrived at a conclusion that the
ingredients of offence under 138 of the Negotiable Instruments Act was not at
all attracted. Thereby acquitted the Accused from the charge under Section
138 of the Negotiable Instruments Act, 1881.
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11. The learned Counsel for the Respondents invited the attention of
this Court to the reported decision of the Hon'ble Supreme Court in the case of
M.M.T.C Ltd and another vs. Medchl Chemicals and Pharma (P) Ltd and
another reported in (2002) 1 Supreme Court Cases 234, wherein it is held as
follows:-
“Pursuant to a memorandum of understanding, the respondent
company issued two cheques, one dated 31-10-1994 and another
dated 10-11-1994 in favour of the appellant company. Both the
cheques when presented for payment were returned with the
endorsement “payment stopped by drawer”. After issuing notices,
the appellant lodged two complaints under Section 138 of the
Negotiable Instruments Act through one L, the manager of its
regional office. The respondent filed two petitions for quashing of
the said complaints. Allowing the petitions the High Court held that
the complaints were not maintainable. The High Court further held
that the Manager (who had lodged the complaints) and the Deputy
General Manager (who was substituted) were merely paid employees
of the appellant company and had not been authorised by the Board
of Directors to sign and file the complaint on behalf of the Company
or to prosecute the same. It further held that the authorisation in
favour of the Deputy General Manager could not cure the defect.
Since in the complaint there was no specific allegation of existence of
any debt or liability, the High Court further held that the cheques
were issued as security and not for any debt or liability existing on
the date of issuance. Opposing the appeals, the respondent
contended inter alia, that the cheque having bounced on account of
stoppage of payment by the drawer and not on account of
insufficiency of funds, Section 138 was not attracted.”
12. By pointing out the above decision, the learned Counsel for the
Respondents/Accused contended that the cheque was given on the assurance
of the Complainant that he will bring the sons of the deceased to vouch the
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contract. When the Complainant did not bring them, stop payment was issued
to the Bank. In any event, there was no consideration passed on from the
Complainant. Since the Complainant did not fulfil the requirement of the
Accused, there is no necessity to honour the cheque. The cheque was not
issued for any past liability but it was issued in advance to enable the
complainant to bring the legal heirs to sign the documents. While so, the
learned Judicial Magistrate is wholly justified in recording a judgment of
acquittal in favour of the Accused/Respondent herein. In such circumstances,
interference of this Court is not warranted and he prayed for dismissal of this
appeal.
Point for Consideration
Whether the judgment dated 27.06.2012 passed in
S.T.C.No.25 of 2011 by the learned Judicial Magistrate, Fast
Track Court (Magisterial level), Hosur is perverse and is to be
set aside?
13. Heard the learned Counsel for the Appellant and the learned
Counsel for the Respondents. Perused the records in S.T.C.No.25 of 2011.
Perused the judgment dated 27.06.2012 passed in S.T.C.No.25 of 2011 by the
learned Judicial Magistrate, Fast Track Court (Magisterial level), Hosur.
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14. From the judgment of the learned Judicial Magistrate, it is found
that the dispute between the Complainant and the Accused is with regard to
the development of land in S.No.145/1, Jinnagara Village, which originally
belonged to one Narasimhaiah. The Complainant/Nagaraj claims to be father-
in-law of the one of the sons of Narasimhaiah viz., Ramaiah and also he holds
the Power of Attorney deed on behalf of the sons of the Principal
Narasimhaiah. He claims to have developed the property by spending
Rs.16,00,000/- (Rupees Sixteen Lakhs). Subsequently, he came to know that
the Accused had entered into development agreement with Narasimhaiah.
Therefore, he had approached the Court of the learned Civil Judge, Hoskote
seeking injunction against the Accused-2 as Defendant. The learned Principal
Civil Judge, Hoskote had granted decree in favour of the Plaintiff/Nagaraj for
the same property. Subsequent to the decree, they entered into compromise. In
the light of the compromise, the Accused issued the cheque No.137135 for
Rs.8,00,000/- and in the light of that settlement, confirmation deed was
executed whereby the Complainant/Nagaraj stated to have assured the
Accused that he will bring all the legal heirs of the Narasimhaiah to affix their
signature on the confirmation deed. In the confirmation deed, the legal heirs
of Narasimhaiah agreed to give up their rights over the property in favour of
the Accused. On such promise, the Accused had issued cheque. As pointed
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out in the reported decision in the case of MMTC Ltd and another vs Medchl
Chemicals and Pharma (P) Ltd and another reported in (2002) 1 Supreme
Court Cases 234, the cheque was returned on the ground that “payment
stopped by the drawer” and it also falls within the Provisions of 138 of the
Negotiable Instruments Act, 1881. But the facts in this case is on the date
when the cheque was presented there was sufficient amount available in the
account of the Accused. The Accused had proved through his Bank Account
furnished before the trial Court as Ex.D-19 that there was sufficient balance to
honour the cheque for Rs.8,00,000/-. Thus, it is evident that the cheque was
issued on condition that the Complainant will bring the three legal heirs of late
Narasimmiah to affix their signature declaring that they have no right or
interest in the property upon receipt of Rs.8 lakhs. When they did not come
forward to sign the documents, there is no obligation on the part of the
Accused to honour the cheque. The learned Judicial Magistrate, therefore,
rightly held that there was no consideration passed on to the Accused and
therefore, the stoppage of payment of the cheque will not attract the
ingredients of Section 138 of the Negotiable Instruments Act, 1881.
15. The agreement between Nagaraj and the Accused in this case is
with regard to the settlement subsequent to the decree in favour of the
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Complainant/Nagaraju in the suit in O.S. No. 138 of 2007. As per the
settlement reached, the Complainant has to bring all the legal heirs of late
Narasimiah to affix their signatures in the settlement deed but they did not
come forward to affix their signature on 04.01.2011. Also the learned Judicial
Magistrate had observed that the Plaintiff had not furnished documents
regarding proof that he had invested Rs.16,00,000/- (Rupees Sixteen Lakhs
only) to develop the property belonging to late Narasimhaiah. He had not
furnished any document as proof of the same. Also on appreciation of
evidence, the learned Judge found out that the Complainant had opened his
account only after issuance of the cheque by the Accused. Therefore, the claim
of the Complainant that he spent Rs.16,00,000/- (Rupees Sixteen Lakhs only)
was not proved. On appreciation of the evidence, the learned Judicial
Magistrate also observed that the Complainant herein claims to be an
Astrologer and his claim made by the Complainant that he had invested money
was not proved before the learned Judicial Magistrate.
16. On perusal of the records, a suggestion was made on behalf of the
Accused in the cross-examination of the Complainant as P.W-1 during which
he admitted in cross-examination regarding the development agreement
between Narasimhaiah and the Accused in the name of Shivapriya. Also he
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admitted that while instituting the suit under Ex.P-2, O.S.No.138 of 2007, he
had not impleaded the Company of the Defendant as proper and necessary
party. Also he had admitted that he had received Rs.2,00,000/- (Rupees Two
Lakhs only) as advance during the time of his daughter's Marriage. He had
admitted in his cross-examination that he had not furnished any document as
claimed that 70% of the sale proceeds from the property is to be given to the
sons of Narasimhaiah and 30% to the Power of Attorney agent, the
Complainant/Nagaraj. He had admitted that during the pendency of the suit in
O.S.No.138 of 2007, he had made representation to the Defendant that they
can enter into sale agreement and compromise the subject matter. He also
admitted that he had received Rs.2,00,000/- (Rupees Two Lakhs only) as
advance sometime in October, 2010 and made representation to the Accused
that he will bring all the legal heirs of the Narasimhaiah to sign the agreement.
The suggestion that Rs.8,00,000/- (Rupees Eight Lakhs only) was issued by
the Accused only on the undertaking given by the Complainant that he will
bring all the legal heirs of the Narasimhaiah to sign on the confirmation deed
was denied by him in cross examination. He admitted that he had signed the
said confirmation deed. He admitted that all the legal heirs of the
Narasimhaiah had signed it except Ramaiah and his two sons. Also he had
admitted that those who signed Confirmation deed was paid by the Accused.
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He had admitted in his cross-examination that there is dispute between him
and his brother. On assessing the cross-examination of Complainant as P.W-1,
the learned Judicial Magistrate observed that the defense of the Accused is
more probable and the stop payment letter issued by the second Accused under
Ex.P-18 was found justified. Therefore, such a finding of the learned Judicial
Magistrate on assessment of evidence, need not be interfered with by this
Court. The statement of the Accused before the Court that on the date of his
examination before the trial Court he was ready to settle Rs.8,00,000/-
(Rupees Eight Lakhs only) provided the Complainant is able to bring Ramaiah
and his sons to sign the document. Therefore, the learned Judicial Magistrate,
had observed that the ingredients of the offence under of Section 138 of the
Negotiable Instruments Act, 1881 had not been attracted as there was no
proper liability. The Accused only made an offer subject to a condition and
that condition had not been fulfilled by the Complainant. It was an offer made
by the second Accused on the promise that the Complainant undertakes to
bring all the legal heirs to give a quietus to the dispute. Therefore, the finding
of the learned Judicial Magistrate in dismissing the Complaint is found proper.
17. The Complainant has to establish his case by raising a
presumption and only then, the burden will shift on the Accused. Here, even
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though, the trial proceeded on the presumption that the Accused had not
denied the issuance of the cheque, the Accused discharged his rebuttal
evidence by issuing a reply notice, adducing evidence and also marking the
documents in support of his claim under Ex.D-1 to Ex.D-19 and thereby he
had proved that there was sufficient amount in his account on the date of
issuance of stop payment under Ex.D-18. Therefore, as pointed in the reported
decision relied by the learned Counsel for the Respondents in MMTC Ltd and
another vs Medchl Chemicals and Pharma (P) Ltd and another reported in
(2002) 1 Supreme Court Cases 234, the Accused had discharged the burden
whereby stop payment is not attracted to the complaint filed by the
Complainant under Section 138 of the Negotiable Instruments Act, 1881 in
this case. If stop payment is issued and there is no sufficient amount in the
account of the Accused on the date of issuance of cheque or on the date of
return of the cheque under the caption stop payment, then it attracts Section
138 of the Negotiable Instruments Act, 1881. Therefore, the reasoning of the
learned Judicial Magistrate, Fast Track Court (Magisterial level), Hosur, is
found proper. It is on proper appreciation of evidence. Therefore, the
judgment of the learned Judicial Magistrate is to be confirmed.
18. In the light of the above discussion, the Point for Consideration is
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answered against the Appellant/Complainant and in favour of the Accused.
The judgment dated 27.06.2012 passed in S.T.C.No.25 of 2011 by the learned
Judicial Magistrate, Fast Track Court (Magisterial level), Hosur is found
proper which does not call for any interference by this Court and the same is
to be confirmed.
In the result, the Criminal Appeal is dismissed as having no merits.
The judgment dated 27.06.2012 passed in S.T.C.No.25 of 2011 by the learned
Judicial Magistrate, Fast Track Court (Magisterial Level), Hosur is confirmed.
02.06.2025
shl
Internet : Yes / No
Index : Yes / No
Speaking/Non-speaking order
Neutral Citation : Yes/No
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To
1. The Judicial Magistrate (Magisterial level),
Fast Track Court, Hosur.
2. The Section Officer,
Criminal Section,
High Court of Madras.
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SATHI KUMAR SUKUMARA KURUP, J
shl
Judgment in
02.06.2025
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