[Cites 14, Cited by 0]
Madras High Court
K.Sivakumar vs V.Shanmugasundram on 25 February, 2026
Author: M.Nirmal Kumar
Bench: M.Nirmal Kumar
Crl.A.No.792 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 25.02.2026
CORAM
THE HONOURABLE MR.JUSTICE M.NIRMAL KUMAR
Crl.A.No.792 of 2019
and Crl.M.P.No.17026 of 2019
K.Sivakumar
Rep. by his Power Agent
Mr.R.Haneesh ... Appellant
Vs.
V.Shanmugasundram ... Respondent
Prayer: Criminal Appeal filed under Section 378 of Cr.P.C. to set aside the
judgment dated 10.10.2019 passed by the learned V Additional Sessions
Judge, Chennai in Crl.A.No.369 of 2018 and convict the
respondent/appellant/accused by confirming the judgment dated 20.06.2018
passed in C.C.No.6664 of 2013 by the learned Metropolitan Magistrate, Fast
Track Judge-III, Saidapet, Chennai.
For Appellant : Mr.M.Fazulul Haq
for M/s.Juris and Justia
For Respondent : Ms.K.Meena
Legal Aid Counsel
Page No.1 of 15
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Crl.A.No.792 of 2019
JUDGMENT
The appellant as complainant filed a private complaint under Section
138 of Negotiable Instruments Act (hereinafter referred to as “NI Act”)
against the respondent in C.C.No.6664 of 2013 before the learned
Magistrate, Fast Track Court-III at Saidapet. The Trial Court by judgment
dated 20.06.2018 convicted the respondent and sentenced him to undergo six
months simple imprisonment and directed to pay the cheque amount of
Rs.13,99,425/- as compensation. Aggrieved against the same, the
respondent preferred an appeal before the learned V Additional Sessions
Judge, Chennai. The Lower Appellate Court by judgment dated 10.10.2019
allowed the appeal setting aside the conviction of the Trial Court. Against
which, the present appeal filed.
2.The complaint is that the respondent availed a loan of Rs.2,00,000/-
from the complainant on 16.06.2008, again borrowed a sum of Rs.5,00,000/-
on 19.01.2009 and further loan of Rs.5,00,000/- on 11.05.2009 apart from
the chit amount of Rs.2,00,000/- taken by him on 25.11.2008 and agreed to
repay the amount together with interest @ 18% and he owed the
complainant a sum of Rs.14,00,000/- including the chit amount. The
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respondent in the meanwhile repaid a sum of Rs.4,01,300/- and calculating
the interest as on 15.01.2013, in total a sum of Rs.13,99,425/- is due to the
appellant. In discharge of the said liability, the respondent issued a cheque
drawn on Allahabad Bank, Tondiarpet Branch bearing Cheque No.092032
dated 17.01.2013 for the said sum. When the cheque was presented by the
complainant with his banker M/s.South Indian Bank Limited, Mylapore,
Chennai on 24.01.2013, the cheque got dishonoured and returned for the
reason “Funds Insufficient” by bank memo dated 28.01.2013. Thereafter,
statutory notice was issued on 13.02.2013. The respondent failed to receive
the notice despite intimation delivered on 18.02.2013. Thereafter complaint
filed, the complainant prosecuted the case through his Power of Attorney
who was examined as PW1 and marked five documents Ex.P1 to Ex.P5.
The accused not examined any witness but marked Ex.D1. On conclusion of
trial, the Trial Court convicted the respondent but the Lower Appellate Court
set aside the conviction and acquitted the respondent.
3.The contention of the learned counsel for the appellant is that the
respondent not denied the cheque and his signature in the cheque/Ex.P2.
The respondent took a defence that statutory notice/Ex.P4 not served on him
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and the postal cover/Ex.P5 was returned for the reason ‘Door locked,
intimation delivered and not claimed’, this would not be a proper reason and
cannot be construed as notice served. The other defence is that when the
respondent joined as subscriber in Sree Amrutha Ambika Chits Private
Limited, Mylapore, Chennai, a signed unfilled cheque was given as security
for the chit transaction which is misused. Further, he took a defence that the
claim of the complainant is time barred debt when it is admitted that the
amount was borrowed in the year 2008-2009 but the cheque in this case is
dated 17.01.2013, hence it is a time barred. The Power of Attorney is not
aware about the transaction details. The Power of Attorney deed is of the
year 2013 and whether it is still in force is not proved and in view of the
above, the complaint is not maintainable. The Trial Court by a detailed
judgment extracted the relevant portion of the evidence, considered the
contention of the respondent and given a finding that Ex.P5/postal cover was
with an endorsement dated 16.02.2013 confirming that door locked and
intimation delivered. Further address found in Ex.P5 and Ex.D1 are one and
the same, further respondent residing in the said address and hence, there
was proper service of notice. With regard to the time barred debt, PW1
denied the same. Further, explanation given that respondent for his debt of
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Rs.14,00,000/- had repaid Rs.4,01,3000/- in the year 2013 which is not
seriously denied or disputed and hence, it is not a time barred debt and the
Trial Court referring to the judgment of the Apex Court in the case of
A.V.Murthy vs. B.S.Nagabasavanna reported in (2002) 2 SCC 642 and
rightly rejected the defence of the accused. The defence taken by the
respondent all rejected and further the respondent not denied the cheque and
his signature. Hence, statutory presumption under Sections 118 and 139 of
NI Act comes into play. Finding that the respondent not probabilized his
defence and on the other hand, the appellant proved the case against the
respondent, the Trial Court rightly convicted the respondent. But the Lower
Appellate Court misread the evidence and taken a view that PW1/Power of
Attorney has no personal knowledge or witnessed the transaction between
the complainant and the accused. The respondent being one of the
subscriber of the chit completed his chit transaction in the year 2008 and
paid all the amount for which he produced Ex.D1, Chit Book of Sree
Amrutha Ambika Chits Private Limited. The Power of Attorney is none
other than the Manager of Sree Amrutha Ambika Chits Private Limited.
Further considering that the complaint is filed not on behalf of the Chit
Company but in individual capacity and the statutory notice sent to the old
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address of the respondent, postal cover returned and thereby giving a
favourable finding to the respondent is not proper. Ex.P2/Cheque was issued
in the individual name of K.Sivakumar by the respondent. Though the said
K.Sivakumar might be Managing Director of Sree Amrutha Ambika Chits
Private Limited, the same would not automatically mean that cheque was
issued for the chit transaction. PW1 categorically stated that cheque was
issued in the name of individual and the Power of Attorney was given by the
said individual. Ex.D1 confirms the address of the respondent. If the
respondent left the place, it is for him to inform the change of address. It is
settled position that notice sent to the last known address is sufficient. In
this case, notice was properly sent.
4.The learned counsel for the appellant further submitted that the
Lower Appellate Court had given a finding that the Power of Attorney
R.Haneesh given his office address as No.195 Kutchery Road, Mylapore,
Chennai, which is the Head Office address of the Chit Fund Company and
he has not given his residential address confirming that the Power of
Attorney is the Personal Manager of the Managing Director of the Chit Fund
Company. Further, undue importance and weightage given to Ex.P2 finding
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that it is a cheque with Core Banking System (CBS). Since Allahabad Bank
introduced CBS cheques in the year 2011 itself, there is no possibility of
Ex.P2/cheque to be issued in the year 2013. The Core Banking System will
have unique account number with minimum of eight digits and maximum of
ten digits and the cheque/Ex.P2 is with six digits confirming it is not a
cheque of recent one. Hence the contention of the respondent that the
security cheque which was given in the year 2008 is not proper. For this
point, the learned counsel for the appellant relied upon the decision of the
High Court of Himachal Pradesh in the case of Prem Lal vs. State of
Himachal Pradesh and another reported in 2024 Supreme (HP) 239,
wherein the Himachal Pradesh High Court referring to the judgment of this
Court in R.Mathiyalagan vs. Jayamani reported in 2016 SCC Online Mad
24818, held that the cheque has been returned for the reason “insufficient
funds” and not returned by the banker that it is not a CTS cheque, there is no
prohibition or restriction in using the cheque. Hence, the finding of the
Lower Appellate Court is not sustainable. The Lower Appellate Court failed
to consider that there was a part payment made in the year 2013 and hence
the contention of the respondent that it is a time barred debt is not
sustainable. The Lower Appellate Court given a finding that how the
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complainant gave loan to the respondent on various dates without collecting
any supporting documents and hence, the loan becomes doubtful is the
subjectiveness of an individual. The respondent had relationship with the
appellant as subscriber to the chit and they had good association. Believing
the representation based on the cheque, loan given. Further the finding of
the Lower Appellate Court that the cheque is not only old but it is time
barred and the complainant could not produce any proof for the transaction
subsequent to 2008-2013 is contra to Section 118 of N.I. Act and wrong
reading of the evidence.
5.In support of his contention, the learned counsel for the appellant
placed reliance on the following decisions:
1) A.V.Murthy vs. B.S.Nagabasavanna reported in 2002 1
Supreme 517
2) Dinesh B.Chokshi vs. Rahul Vasudeo Bhatt and
another reported in 2013 3 CurCC 331
3) G.Thanickachalam vs. R.Jayasankar reported in 2022
(2) CivCC 362
4) K.Hymavathi vs. The State of Andhra Pradesh and
another reported in 2023 0 Supreme (SC) 843
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5) K.Ramesh vs. K.Kothandaraman reported in 2024 0
Supreme (SC) 521
6) M.Balaji vs. Perim Janardhana Rao and Others
reported in 2024 0 Supreme (Mad) 477.
6.The learned counsel for the respondent strongly opposed the
appellant’s contention and submitted that the appellant in this case is
prosecuted by a Power of Attorney, Personal Manager of K.Sivakumar, who
is the Managing Director of Sree Amrutha Ambika Chits Private Limited
having branch office at No.197, Kutchery Road, Mylapore, Chennai and
Head Office at No.195, Kutchery Road, Mylapore, Chennai. The Power of
Attorney deed (Ex.P1) is dated 22.03.2013. Admittedly, there was a chit
transaction between the respondent and the appellant and it was in the year
2008. Ex.D1 confirms the chit transaction of Rs.2,00,000/-, entire chit
amount paid as on 23.12.2008 and thereafter, there is no other transaction
between the appellant and the respondent. Referring to the statutory notice,
the learned counsel submitted that in the notice it is stated that the
respondent availed loan of Rs.2,00,000/- on 16.06.2008, Rs.5,00,000/- on
19.01.2009, another Rs.5,00,000/- on 11.05.2009 and Rs.2,00,000/- during
the chit transaction on 25.11.2008. Thus specific borrowal dates given and
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huge amount is said to have been paid to the respondent, no contemporary
documents or any materials produced to prove loans gives. Ex.D1 would
prove that after 23.12.2008 there is no other transaction. On 23.12.2008
receipt of the chit amount paid recorded. Had there been any dues as
claimed in the statutory notice, this acknowledgment on 23.12.2008 would
not have been given. Further in the statutory notice, it is stated that the
respondent paid Rs.4,01,300/-, when it was paid, what is the mode and in
how many installments, no details given either in the statutory notice or in
the proof affidavit and evidence. Thus, the contention of the respondent that
the cheque which was given in the year 2008 as security for the chit
transaction and filled up for a time barred debt probabilized. Hence, prayed
for dismissal of the appeal.
7.Considering the submissions made and on perusal of the materials, it
is seen that in this case the appellant as complainant prior to filing of the
complaint sent statutory notice/Ex.P4. From reading of the statutory notice,
it is seen that the complainant projects his case as though the respondent
availed loan of Rs.2,00,000/- on 16.06.2008, Rs.5,00,000/- on 19.01.2009,
another Rs.5,00,000/- on 11.05.2009 and Rs.2,00,000/- during the chit
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transaction on 25.11.2008, agreeing to repay the loan amount with interest
@ 18%. The complainant further states that the respondent paid
Rs.4,01,300/- and balance of Rs.9,98,700/- to be paid with interest, for
which, cheque dated 17.01.2013 for Rs.13,99,425/- was issued by the
respondent. It is seen in the complaint and in the sworn affidavit, the same
is confirmed. The specific stand of the respondent is that the respondent was
a subscriber to the chit in Sree Amrutha Ambika Chits Private Limited, on
23.12.2008 the entire chit subscription amount paid which is proved by
Ex.D1. In this case, the complainant K.Sivakumar is the Managing Director
of Sree Amrutha Ambika Chits Private Limited and the Power of Attorney
R.Haneesh is his Manager. When the appellant was questioned as to chit
and other transactions, PW1 unable to give any details. Though he states
that the loan was given on various dates but no contemporary documents
produced. It is seen that the loan was availed from 25.11.2008 and lastly on
11.05.2009, in this case the cheque is dated 17.01.2013 which is well beyond
three years limitation period. In the absence of any contemporary
documents or materials, the cheque is for a time barred debt. Though
explanation given that Rs.4,01,300/- was paid as part repayment of loan but
when and how it was paid, there is no answer. The respondent denied such
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payment and his contention is that a signed blank cheque given in the year
2008 as security during the chit transaction was filled up, misused and a case
projected as though Ex.P2 was issued in discharge of liability. In this case,
the respondent denied making any part and further, the appellant is unable to
give either loan details or the details of part payment. Hence, for a time
barred debt, the cheque/Ex.P2 is projected. Further, it is seen that the Power
of Attorney/PW1 given his office address which is Head Office of the Chit
Fund Company. PW1 admits that no supporting documents collected when
the loan was given to the respondent. He further admits that there is no
receipts or any documents to show that there was transaction between 2008
and 2013 and admits that the Chit Fund Company is a registered
organization, in such circumstances there cannot be any transaction without
proper records or documents. There is no witness to the Power of Attorney
Deed/Ex.P1. On perusal of Ex.D1, it is recorded that the entire amount paid
and chit closed on 23.12.2008. PW1 not disputed or objected to Ex.D1. For
the loan payment and repayment of part of the loan, there is no details or
materials available and the appellant is unable to give any reasons. In the
case of A.C.Narayanan vs. State of Maharashtra and another reported in
2013 (4) MLJ(Crl.) 213(SC), the Apex Court held that the complaint can be
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prosecuted by a Power of Attorney but the Power of Attorney must be aware
about the transaction and give details. When the Power of Attorney failed to
give details, his principal ought to have get into witness box to clear the
doubt, but in this case the appellant failed to do so. From the evidence and
materials, it is clear that the loan transaction between the appellant and the
respondent is of the year 2008 and thereafter, there have been no
transactions and for the loan said to have been given in the year 2009, the
cheque/Ex.P2 of the year 2013 is projected which is nothing but a time
barred debt. In view of the above, it is seen that the respondent had
probabilized his defence and the Lower Appellate Court rightly allowed the
appeal and set aside the conviction of the Trial Court. Hence, this Court
finds no reason to interfere with the finding of the Lower Appellate Court.
8.In the result, the Criminal Appeal stands dismissed. Consequently,
connected miscellaneous petition is closed.
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9.This Court appreciates Ms.K.Meena, Legal Aid Counsel for the
respondent for her strenuous efforts in doing research and putting forth the
case of the respondent effectively. The Legal Services Authority to pay the
remuneration to the Legal Aid Counsel as per Rules.
25.02.2026
Index : Yes/No
Speaking Order/Non Speaking Order
Neutral Citation: Yes/No
cse
To
1.The V Additional Sessions Judge,
Chennai.
2.The Metropolitan Magistrate,
Fast Track Judge-III,
Saidapet, Chennai.
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M.NIRMAL KUMAR, J.
cse
25.02.2026
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