Yenigandla Venakateswr Rao, vs Gurram Shiva Prasad, Another,
2021 Latest Caselaw 3987 Tel

         THE HON'BLE Dr. JUSTICE SHAMEEM AKTHER


                 CRIMINAL APPEAL No.430 of 2008

JUDGMENT:

This Criminal Appeal, under Section 378(4) of the Code of

Criminal Procedure, 1973 (for short, 'Cr.P.C'), is filed by the

appellant/complainant, challenging the judgment, dated

31.12.2007, passed in C.C.No.250 of 2003 by the Judicial

Magistrate of First Class at Madhira, whereby, the Court below

acquitted the respondent No.1/accused under Section 255(1) of

Cr.P.C., for the offence punishable under Section 138 of Negotiable

Instruments Act, 1881 (for short, 'N.I.Act').

2. Heard the leaned counsel for the appellant/complainant, the

learned Additional Public Prosecutor appearing for respondent

No.2/State and perused the record.

3. It is evident from the record that that during the pendency of

this appeal, the appellant/complainant died and the Legal

representatives of the appellant/complainant filed Crl.M.P.No.18 of

2010 seeking leave of this Court to continue this appeal. Vide

order, dated 05.02.2010, this Court granted leave and as such, the

legal representatives of the appellant/complainant are brought on

record as appellant Nos.2 to 5.

4. Learned counsel for the appellant/complainant would submit

that the respondent No.1/accused borrowed an amount of

Rs.1,00,000/- from the complainant on 17.05.2002 promising to

repay the same with interest @ 24% per annum and executed a

promissory note. In spite of repeated demands, the accused failed

Dr.SA, J Crl.A.No.430 of 2008

to repay the said amount and issued a cheque for Rs.1,25,000/-

towards discharge of legally enforceable debt. When the said

cheque was presented for payment, the same got dishonoured

stating the reason as 'exceeds arrangement'. There is a valid legal

notice, dated 05.07.2003. In spite of the same, the amount was

not paid by the accused, which constituted cause of action against

him. Though there is clear and cogent evidence on record, the

Court below erroneously acquitted the accused. Further, the Court

below erred in holding that the complainant is not possessing valid

license to do money lending business. In the cross-examination of

P.W.1, it is elicited that the money was advanced to the accused

personally. There is legally enforceable debt. The trial Court also

erred in holding that Ex.P.1 cheque was given as collateral

security. It further erred in holding that a complaint under Section

138 of N.I.Act cannot be filed in respect of an unenforceable debt

and ultimately prayed to allow the appeal as prayed for.

5. On the other hand, the learned Additional Public Prosecutor

would contend that the categorical admissions of the complainant

in his evidence clearly establishes that he was doing money lending

business without license. The circumstances of the case reveal

that Ex.P.1 cheque as not issued by the accused in discharge of

legally enforceable debt. The Court below, after analyzing the

entire evidence on record and referring to various precedents,

rightly acquitted the accused of the offence under Section 138 of

N.I.Act. There are no circumstances to interfere with the same and

ultimately prayed to dismiss the Criminal Appeal.

Dr.SA, J Crl.A.No.430 of 2008

6. In view of the above submissions, the points that arise for

determination in this appeal are as follows:

1. Whether there is legally enforceable debt as alleged by the appellant/complainant?

2. Whether Ex.P.1 cheque was issued by the respondent No.1/accused towards discharge of legally enforceable debt?

3. Whether the judgment, dated 31.12.2007, passed in C.C.No.250 of 2003 by the Judicial Magistrate of First Class at Madhira, is liable to be set aside, consequently, whether the respondent No.1/accused is liable to be convicted for the offence punishable under Section 138 of N.I.Act?

POINTS:-

7. The case of the appellant/complainant, as averred in the

subject private complaint, is that the accused borrowed an amount

of Rs.1,00,000/- from the complainant on 17.05.2002 and

executed a promissory note. In spite of repeated demands, the

accused did not repay the said amount and finally issued a cheque

bearing No.175327 for Rs.1,25,000/- drawn on Andhra Bank,

Madhira Branch, towards discharge of legally enforceable debt.

When the said cheque was presented in bank for payment, it was

dishonoured stating the reason 'exceeds arrangement'. The

complainant got issued legal notice, dated 05.07.2003 demanding

the accused to pay the amount. In spite of receiving the said legal

notice, the accused neither replied to the same nor repaid the

amount. Hence, the complainant filed the subject private

complaint to take action against the accused.

8. In support of his case, the complainant himself got examined

as P.W.1 besides P.Ws.2 and 3 and got marked Exs.P.1 to P.7.

Dr.SA, J Crl.A.No.430 of 2008

P.W.2 and P.W.3 are the Branch Managers of Andhra Bank. Ex.P.1

is the cheque bearing No.175327 for Rs.1,20,000/-, dated

17.06.2003. Ex.P.2 is Memo issued by Andhra Bank, dated

25.06.2003. Ex.P.3 is the Memo issued by SBH, Madhira Branch,

dated 26.06.2003. Ex.P.4 is the Memo issued by SBH, Wyra

Branch, dated 03.07.2003. Ex.P.5 is the office copy of Legal

Notice, dated 05.07.2003. Ex.P.6 is the postal acknowledgement

and Ex.P.7 is the certified copy Promissory note, dated 17.05.2002.

9. P.W.1 deposed in his cross-examination that he was doing

chit fund business and also money lending business since 7 to 8

years in the name and style of 'Mithra Employees Finance' and

'Wyra Chit Fund and Finance (Pvt) Limited, Wyra; he had

acquaintance with the accused since 7 to 8 years during chit

transactions; the accused is one of the subscribers in Chit No.LTWA

22/11 and LTWA 22/12, during June, 2001 and the accused was

the successful bidder for both the chits and prized amount was paid

to the accused, who in turn, produced sureties. The case of the

accused is that there is no legally enforceable debt as alleged and

that the blank cheque was not given towards discharge of any

legally enforceable debt, but for collateral purpose with regard to

chit transaction and that the complainant, in order to gain

wrongfully, concocted a story that the subject cheque was given

towards discharge of legally enforceable debt. P.W.1 stated in his

cross-examination that the accused came to his house, handed

over the subject cheque, which was already drafted. He further

deposed that he do not know whether the writing on the subject

cheque was that of the accused and where it was drafted. Further

Dr.SA, J Crl.A.No.430 of 2008

the subject cheque, dated 17.05.2002 was for Rs.1,20,000/.

Under the circumstances, the trial Court rightly held that the

cheque was not drafted by the accused and that the accused is not

a rustic man or an illiterate and that if at all the accused issued the

subject cheque towards discharge of legally enforceable debt, it

should be for Rs.1,24,000/- since the interest on the amount

alleged to be borrowed was 24% per annum and that the

circumstances reveal that Ex.P.1 cheque was not issued by the

accused towards legally enforceable debt. Further, the admissions

of the complainant in his evidence as P.W.1 clearly reveals that the

complainant is doing money lending business without license in

Telangana area. He did not file a single document to show that he

was having a valid license to do money lending business. Further,

he admitted in his evidence that he filed 20 suits for recovery of

money and 12 cases for dishonour of cheques before various

Courts. In the given circumstances, the Court below, relying on

Krishnam Raju Finance, Hyderabad Vs. Abida Sultana and

another {2004 Volume I ALD (Crl) 546} wherein it was held that

since the appellant therein had no money lending business license,

it cannot be said that there was a legally enforceable liability,

rightly concluded that there is no legally enforceable debt to be

discharged by the accused.

10. The Explanation to Section 138 of N.I.Act clearly states that

the dishonoured cheque shall relate to a legally enforceable debt or

liability. In the instant case, since the complainant had no valid

money lending business, he cannot legally enforce such a debt of

liability. Under these circumstances, the Court below rightly

Dr.SA, J Crl.A.No.430 of 2008

concluded that the complainant is not entitled to prosecute the

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

the accused is entitled for acquittal. The conclusions reached by

the trial Court are based on evidence on record. There is nothing

to take a different view. The accusations against the accused

under Section 138 of N.I.Act are not proved beyond reasonable

doubt. The contentions raised on behalf of the complainant do not

merit consideration. The Criminal Appeal is devoid of merit and is

liable to be dismissed.

11. In the result, the Criminal Appeal is dismissed, confirming

the judgment, dated 31.12.2007, passed in C.C.No.250 of 2003 by

the Judicial Magistrate of First Class at Madhira.

Miscellaneous petitions, if any, pending in this Criminal

Appeal, shall stand closed.

__________________ Dr. SHAMEEM AKTHER, J

30th November, 2021 Bvv