K.Ram Murthy, R.R.Dist. vs Raj Chainani, Secbad Ano
2022 Latest Caselaw 6222 Tel

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                                                                                 Dr. GRR, J
                                                   crlrc_1276, 1277, 1278 and 1279 of 2016

                THE HON'BLE DR. JUSTICE G.RADHA RANI

     CRIMINAL REVISION CASE Nos. 1276, 1277, 1278 and 1279 of 2016


COMMON ORDER:


        These Criminal Revision Cases are filed by the petitioner who is the

accused in C.C.Nos.253 of 2011, 383 of 2012, 263 of 2011 and 257 of 2011 on

the file of the XIX Special Magistrate, Hyderabad for the offences under

Section 138 of the Negotiable Instruments Act (for short 'NI' Act) aggrieved by

the concurrent findings of conviction recorded against him by the trial court as

well as by the Special Judge for Trial of Offences under SC and ST (POA) Act-

cum-VI Additional Metropolitan Sessions Judge, Secunderabad in Criminal

Appeal Nos.508 of 2015, 507 of 2015, 506 of 2015 and 509 of 2015

respectively.


2.      The parties are herein after referred as arrayed before the trial court.


3.      The case of the complainants was that all the complainants in the above

cases were family members, the complainant in Crl.R.C.No.1279 of 2016 and

the accused were acquainted with each other and out of the said acquaintance;

the accused requested the complainant to lend certain amounts to meet his

personal and business needs. The accused represented that his house was under

mortgage to the Kakatiya Co-operative Urban Bank Limited, Chintal,
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                                               crlrc_1276, 1277, 1278 and 1279 of 2016

Hyderabad and that he required money to avoid distress sale by the bank. The

complainant in Crl.R.C.No.1279 of 2016 agreed to lend the amount by himself

as well as through his other family members (complainants in the other

Criminal Revision Cases) and lent Rs.18,50,000/- to the accused.                  The

complainant acknowledged the receipt of the amount vide receipt dated

20.12.2007 in favour of the complainant and his family members and had given

post-dated cheques dated 19.06.2008 drawn on the Kakatiya Co-operative

Urban Bank Limited, Chintal, Hyderabad.        Subsequently, the complainants

presented the said cheques through their bankers but the same were returned

unpaid with an endorsement "insufficient funds". The complainants tried to

contact the accused, but in vain.    As such, got issued legal notices dated

17.07.2008 to the accused calling upon him to pay the amount. The accused

refused to receive the said notices. Inspite of opportunity, the accused neither

paid money nor gave any reply, as such the complainants filed the complaint.


4.    All the four (04) cases were taken cognizance by the XI ACMM,

Hyderabad but subsequently were transferred to XIX Special Magistrate,

Hyderabad as per the proceedings of the Metropolitan Sessions Judge,

Hyderabad and they were re-numbered.


5.    During the course of trial, the complainants were examined as PW1 and

the Stock Assistant of Kakatiya Co-operative Urban Bank Limited, Chintal

Branch, Hyderabad was examined as PW2 and got marked the common receipt
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                                               crlrc_1276, 1277, 1278 and 1279 of 2016

passed by the accused on 20.12.2007 as Ex.P1 and the cheques issued by the

accused were marked as Ex.P2. The cheque return memo was marked as Ex.P3.

The office copy of the legal notice dated 17.07.2008 was marked as Ex.P4. The

postal receipt in respect of the legal notice sent by Registered Post was marked

as Ex.P5. The un-served postal envelope with an endorsement "refused" as

Ex.P6. The cheque given by the accused during the pendency of the case dated

28.03.2013 as Ex.P7 and the memo issued by the bank in respect of the said

cheque as Ex.P8. In Crl.R.C.1278 of 2016, two (02) cheques were marked as

Exs.P2 and P3, the cheque return memos were marked as Ex.P4 and P5 and the

other documents were marked respectively as P6 to P10.


6.    In all the four (04) cases, the statement of the account of the accused

issued by the Kakatiya Cooperative Urban Bank Limited was marked as Ex.C1.

The accused examined himself as DW1, and he got marked the letter issued by

M/S.Magma Leasing Limited as Ex.D1.


7.    On considering the oral and documentary evidence on record, the trial

court found the accused guilty for the offence under Section 138 of the NI Act

and sentenced him to undergo rigorous imprisonment for a period of one year

and further directed to pay the cheque amounts towards compensation, in

default to undergo simple imprisonment for a period of three (03) months in all

the cases.
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                                                                               Dr. GRR, J
                                                 crlrc_1276, 1277, 1278 and 1279 of 2016

8.       Aggrieved by the said conviction and sentence recorded by the trial court

against him, the accused preferred appeals. The appeals were heard by the

Special Judge for Trial of Offences under SC and ST (POA) cum VI Additional

Metropolitan Sessions Judge, Secunderabad and on re-appreciation of evidence,

the lower appellate court dismissed all the appeals confirming the conviction of

the accused for the offence under Section 138 of the NI Act but modified the

sentence by reducing the imprisonment from one year to six months by

maintaining the other part of the sentence.


9.       Aggrieved further, the petitioner-appellant-accused preferred these

revisions contending that both the courts had not considered the evidence in a

proper perspective and recorded conviction mechanically without applying

judicious mind. Both the courts below failed to appreciate Ex.D1 document and

also erred in placing reliance upon Ex.P1 document which was a common

receipt and failed to appreciate that notices were not received by the accused.

Both the courts erred in considering the cheque return memos wherein it was

stated that the account of the petitioner was blocked by the banker. When the

account of the petitioner was blocked, the petitioner would not be responsible if

the cheque was not cleared by his banker and prayed to allow the revisions by

setting aside the convictions recorded by the trial court and the lower appellate

court.
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                                                 crlrc_1276, 1277, 1278 and 1279 of 2016

10.   Heard the learned counsel for the petitioner and the learned counsel for

the respondents.

11. Perused the record.

12. The case of the complainants was that the complainant in

Crl.R.C.No.1279 of 2016 and his family members lent an amount of

Rs.18,50,000/- to the accused for his personal and business needs and the

accused agreed to repay the amount by issuing post-dated cheques but failed to

repay the amount, when the cheques were presented they were returned on the

ground that there were insufficient funds in the account of the accused. As such,

they issued legal notice to the accused but the accused refused to receive the

notice, as such filed the complaints.

13. The defence taken by the accused was that, he carried business in oil

products jointly with the complainant in Crl.R.C.No.1279 of 2016 but stopped it

due to misunderstandings developed between them, the complainant in

Crl.R.C.No.1279 of 2016 and his relatives were in possession of his cheque

book and signed blank documents given towards security and the same were

misused by filing false cases.

14. The trial court observing that the accused had not disputed his signatures

on the common receipt as well as on the cheques, and as the legal presumptions

are in favour of the complainants, the holder of the cheques that the cheques

Dr. GRR, J crlrc_1276, 1277, 1278 and 1279 of 2016

were issued in discharge of legally enforceable debt as provided under Section

139 of the NI Act and the burden would lie upon the accused to rebut the said

presumption by adducing cogent evidence and that the accused admitted in his

cross-examination that no notice was issued by him seeking return of the

cheques from the complainant and no proof was adduced by him to show that

the cheques were given by him to the complainant (in Crl.R.C.1279 of 2016) for

security and no question was put to the complainants in their cross-examination

that the receipt would not bear the signature of the accused nor the same was

obtained under threat or under any undue influence, held that the accused failed

to rebut the presumption.

15. The trial court further observed that the objections taken for marking the

receipt as Ex.P1 could not be sustained and the notices sent to the accused were

refused by him and the accused failed to elicit that the notices were addressed to

any wrong address nor that he was not residing in the given address nor

examined the post-man in proof of it and no evidence was adduced by him to

show that he shifted his residence before issuing legal notice to him, considered

that it was a valid service of legal notice and held that the complainant

successfully proved the case against the accused for the offence under

Section 138 of the NI Act.

16. Before the lower appellate court, the accused had taken the plea that

Ex.P1 receipt was not signed by him either on a stamp paper or on any revenue

Dr. GRR, J crlrc_1276, 1277, 1278 and 1279 of 2016

stamp and there were no witnesses to it and the said receipt signed on a white

paper was not a valid document and could not be taken into consideration as a

supporting document to Ex.P2 cheque. He also contended that Ex.P2 cheque

was not issued towards legally enforceable liability or debt. The lower appellate

court also observed that the accused had not denied that the signatures on

Exs.P1 and P2 did not belong to him but had taken the defence that he and the

complainant Gangaram Ramrakhiyani (complainant in Crl.R.C.No.1279 of

2016) did joint business for ten (10) years prior to 2007 and to establish the said

fact, he filed and marked Ex.D1 document. Ex.D1 document was a notice given

by one M/S.Magma Leasing Limited dated 21.06.2007, it was a registered letter

sent to Gangaram Ramrakhiyani (Complainant in Crl.R.C.1279 of 2016) and

one T.Sudarshan and K.Ram Murthy (accused). The substance of the said letter

was that the above three (03) people had taken a vehicle viz., Eicher 10.90 and

subsequently failed to pay the amount borrowed. As such, the said vehicle was

taken away and sold and still the above three (03) people including the accused

were due of Rs.3,24,498/- and the company demanded to pay the said amount

within seven (07) days from the date of receipt of the letter.

17. The said document was filed to show that the accused, the complainant

(in Crl.R.C.1279 of 2016) and one T.Sudarshan did joint business prior to 2007.

The lower appellate court observed that except marking Ex.D1, no other

evidence was adduced by the accused to prove the contents of the document and

Dr. GRR, J crlrc_1276, 1277, 1278 and 1279 of 2016

had not examined the other person by name T.Sudarshan to prove the fact that

all the three of them did joint business.

18. With regard to the contention of the accused about Ex.P1 also, the lower

appellate court observed that the accused did not raise such objection at the time

of marking of the document and allowed the complainant to mark the said

document and acted upon and subsequently raised objection at the time of

arguments, as such his objection could not be considered. The lower appellate

court observed that on a plain reading of Ex.P1, it would show that having

received Rs.18,50,000/-, the accused had given five (05) post-dated cheques.

Even with regard to the contention of the accused that the cheques were given

towards security, the lower appellate court relied upon the judgment of the

Hon'ble Apex Court in Don Ayengia v. State of Assam & Ors1, wherein it was

held that:

"even if the cheques were given as security, the cheques shall have to be returned once the amount was paid. If the amount was not paid within the period stipulated, the cheques were liable to be presented for otherwise, there was no logic or reason for there having been issued and handed over in the first instance. If non-payment of the agreed debt or liability within the time specified would not entitle the holder to present the cheque for payment, the issue and delivery of any such cheque would be meaningless and futile".

19. Thus, even if the cheques were given as security, the burden lies upon the

accused to prove that in what circumstances he had given them as a security and

whether he paid the amount due or issued any notice to the complainant for

(2016) 3 SCC 1

Dr. GRR, J crlrc_1276, 1277, 1278 and 1279 of 2016

return of the said cheques after the said amount was paid. Thus, the burden lies

upon the accused to adduce such evidence. It is open for the accused to rely on

evidence led by him or to rely on the materials submitted by the complainant to

raise a probable defence. The accused examined himself as DW1 and raised the

defence that he and the complainant did joint business and given the said

cheques as a security to the complainant but failed to adduce any evidence to

show the circumstances in which he had given the said cheques as a security to

the complainant. He also failed to explain the circumstances under which he

signed on Ex.P1 receipt. Thus, he failed to adduce any probable defence.

20. The lower appellate court also observed that the accused did not deny his

address on the cover under Ex.P6 as such, by taking aid of Section 114 of

Indian Evidence Act and Section 27 of General Clauses Act, the lower appellate

court observed that when a cover was addressed to a particular addressee and

that the address was correct, a presumption would arise that the legal notice was

sent to the address and the addressee had got knowledge about the contents in

the said cover or letter and considered that the legal notice was served on the

accused. Hence, the lower appellate court observed that the evidence of PW1

coupled with the document marked, positively established that the accused

borrowed Rs.18,50,000/- and had given five (05) post-dated cheques and those

cheques were bounced due to insufficient funds.

Dr. GRR, J crlrc_1276, 1277, 1278 and 1279 of 2016

21. The contentions of the accused that the cheques were returned by the firm

under the proprietorship of the accused and the same could not be enforced for

the personal loans taken by him, also were rightly answered by the courts below

observing that Ex.P1 receipt would show that to meet the personal as well as for

his business purposes, the accused borrowed the said amount from the

complainant and others. The courts below had also taken into consideration that

the accused had given another cheque towards part-satisfaction of the

complainant debts when the matter was pending before the court but the said

cheque was also bounced due to account blocked and returned unpaid.

22. The contention of the accused was that when his account was blocked by

his bank, he was not responsible. But, however, the case was filed not for the

subsequent bouncing of the cheque but for the earlier bouncing of the cheque

which was returned on the ground of insufficient funds. The contention of the

accused that the statement of his bank account copy would not disclose that he

borrowed money of Rs.18,50,000/- from the complainant as the same would not

reflect in his account maintained in the Kakatiya Co-operative Urban Bank

Limited was answered by the lower appellate court observing that as per the

facts and circumstances of the case, the accused was having several other bank

accounts. Basing on Ex.C1 bank account, it could not be said that the cheque

was allegedly given by the complainant was not en-cashed through the Kakatiya

Cooperative Urban Bank Limited account maintained by the accused.

Dr. GRR, J crlrc_1276, 1277, 1278 and 1279 of 2016

23. Thus, both the trial court and the lower appellate court rightly held that

the accused failed to raise a probable defence which would create a doubt about

the existence of legally enforceable debt and found the accused guilty for the

offence under Section 138 of the NI Act.

24. This Court does not find any illegality or impropriety or irregularity in the

findings of the courts below to arrive at such a conclusion.

25. But, however considering the judgment of the Hon'ble Apex Court in

M/s.Kalamani Tex v. P.Balasubramanian2 wherein the three-Judge bench of

the Hon'ble Apex Court in its judgment delivered on 10.02.2021 held that:

"There needs to be a consistent approach towards awarding compensation and unless there exists special circumstances, the courts should uniformly levy fine up to twice the cheque amount along with simple interest @9% per annum",

it is considered fit to modify the sentence of imprisonment to that of payment of

fine of double the cheque amount and direct the fine amount to be paid as

compensation to the complainants and only in the event of the failure of the

accused to pay the fine amount, he is directed to undergo penalty of rigorous

imprisonment of one year as imposed by the trial court. Hence, the sentence is

modified in the manner as indicated above.

26. In the result, all the Criminal Revision Cases are dismissed confirming

the conviction of the accused imposed by the trial court for the offence under

(2021) 5 SCC 283

Dr. GRR, J crlrc_1276, 1277, 1278 and 1279 of 2016

Section 138 of the NI Act, but modifying the sentence of imprisonment to that

of fine of double the cheque amount and on payment of the said amount, the

same shall be paid as compensation to the complainant and in default of

payment of the same to undergo rigorous imprisonment for a period of one year.

Miscellaneous applications pending, if any, shall stand closed.

____________________ Dr. G.RADHA RANI, J

29th November, 2022 nsk.