Telangana High Court

Sri B. Manik Rao vs The State Of Andhra Pradesh, on 28 March, 2024

          THE HON'BLE SRI JUSTICE E.V.VENUGOPAL

         CRIMINAL REVISION CASE No.2631 OF 2013

ORDER:

1 This criminal revision case is filed challenging the legality and

validity of the judgment dated 30.12.2013 passed in Criminal Appeal

No.208 of 2012 on the file of the Court of the V Additional

Metropolitan Sessions Judge (Mahila Court), Hyderabad, wherein and

whereby the learned Additional Sessions Judge confirmed the

conviction and sentence imposed in C.C.No.247 of 2011 by the

learned XIV Special Magistrate, Hyderabad upon the petitioner to

suffer rigorous imprisonment for six months and also to pay fine of

Rs.3,000/-, in default of payment of fine, to suffer simple

imprisonment for three months for the offence punishable under

Section 138 of N.I. Act.

2 The second respondent herein instituted a private complaint

against the petitioner under Section 200 Cr.P.C. alleging that the

petitioner took hand loan of Rs.2.00 lakhs from the second

respondent to meet his urgent necessities on 02.01.2006. The

petitioner executed a promissory note agreeing to repay the loan

amount within a period of three months. The petitioner issued a

cheque bearing No.781823 dated 30.5.2006 for a sum of Rs.2.00

lakhs drawn on Vysya Bank, Bidar branch, towards discharge of the

hand loan. However, on presentation, the cheque was dishonoured

with an endorsement 'account closed'. Thereupon, the second

respondent issued a notice dated 13.7.2006, to the petitioner, which

was returned with an endorsement 'refused'. Hence the complaint.

3 The case of the petitioner is total denial. However, there is no

dispute with regard to the cheque. But it is the case of the petitioner

that he lost his cheque book. The second respondent foisted a false

case against the petitioner by using the unused cheques available in

the said lost cheque book. It is also his contention that he has no

acquaintance with the second respondent and he had never seen

him. On the contrary, the case of the second respondent was that

he got acquaintance with the petitioner through his relative by name

Takaji. As seen from the record, the said Takaji was not examined in

the Court.

4 If really, being a literate, the petitioner lost his cheque book, he

ought to have lodged a complaint with the police or should have

intimated to his banker in that connection. But he did not explain

what steps he has taken in that regard. No prudent man will keep

quiet if he lost his cheque book.

5 The normal and usual practice and procedure is that when an

account was intended to be closed, the bank authorities take back

the debit cards and cheque books connected to the said account

from the account holder. In the instant case the case of the second

respondent was that the cheque was returned with an endorsement

'account closed'. So the version of the petitioner in this regard seems

to be improbable and unbelievable.

6 The petitioner has not stated where he lost his cheque book.

The petitioner is resident of Bidar and the second respondent is

resident of Hyderabad. It is also not explained how second

respondent came into possession of the cheque book. No enmity

was also attributed to the second respondent with the petitioner. So

the contention of the petitioner that the second respondent forged

the signatures of the petitioner and fabricated the contents of the

cheque does not hold water.

7 It is the contention of the second respondent that the petitioner

executed an on demand promissory note in his favour,

acknowledging the loan amount. The signatures of the petitioner on

the promissory note and the cheque also tallied and there was no

ambiguity on this.

8 It is also to be seen that the legal notice addressed by the

second respondent was returned with an endorsement 'refused'. So

the petitioner must have knowledge about the contents of the notice.

If at all he has no acquaintance with the second respondent, what

prompted him to refuse the legal notice, was also left unanswered.

So, it has to be presumed that the petitioner approached the second

respondent at Hyderabad in order to take the alleged hand loan.

9 The learned counsel for the petitioner relied on the following

judgments:

1) Uttam Ram vs. Devinder Singh Hudan 1, Rajaram S/o

Sriramulu Naidu vs. Maruthachalam 2, 3) Krishna Janardhan Bhat vs.

Dattatraya G. Hegde 3, 4) M.S.Narayana Menon vs. State of Kerala4,

5) Kapil Kumar vs. Raj Kumar5 and 6) Judgment dated 10.01.2014 on

the file of the Court of the XIV Additional Judge - cum - XVIII

Additional Chief Metropolitan Magistrate, Hyderabad in C.C.No.10 of

2010 in support of his contentions. However, in my considered view

the facts of the cases cited above are not applicable to the facts and

circumstances of the present case.

10 For all the aforesaid reasons, I am of the considered view that

the second respondent has proved the guilt of the petitioner for the

offence punishable under Section 139 of N.I.Act and the petitioner

failed to rebut the same by adducing cogent and convincing evidence

in order to rebut the said presumption.

11 Both the Courts below have concurrently held that the

petitioner is guilty of the offence and that he has failed to rebut the

(2019) 10 SCC 287

2023 LiveLaw (SC) 46

(2008) 4 SCC 54

(2006) 6 SCC 39

(2022) 10 SCC 281

presumption. Hence I see no illegality much less any material

irregularity in the impugned judgments and hence the present

criminal revision case is liable to be dismissed.

12 In the instant case, the petitioner was imposed rigorous

imprisonment of six months and also a fine of Rs.3,000/-.

13 In Damodar S.Prabhu vs Sayed Babalal H6 the Hon'ble

Supreme Court while observing that it is quite obvious that with respect to

the offence of dishonour of cheques, it is the compensatory aspect of the

remedy which should be given priority over the punitive aspect, held as

follows:

3. However, there are some larger issues which can be appropriately addressed in the context of the present case. It may be recalled that Chapter XVII comprising sections 138 to 142 was inserted into the Act by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (66 of 1988). The object of bringing Section 138 into the statute was to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments. It was to enhance the acceptability of cheques in settlement of liabilities by making the drawer liable for penalties in case of bouncing of cheques due to insufficient arrangements made by the drawer, with adequate safeguards to prevent harassment of honest drawers. If the cheque is dishonoured for insufficiency of funds in the drawer's account or if it exceeds the amount arranged to be paid from that account, the drawer is to be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both. It may be noted that when the offence was inserted in the statute in 1988, it carried the provision for imprisonment up to one year, which was revised to two years following the amendment to the Act in 2002. It is quite evident that the legislative intent was to provide a strong criminal remedy in order to deter the worryingly high incidence of dishonour of cheques. While the possibility of imprisonment up to two years provides a remedy of a punitive nature, the provision for imposing a `fine which may extent to twice the amount of the cheque' serves a compensatory purpose. What must be remembered is that the dishonour of a cheque can be best described as a regulatory offence that has been created to serve the public interest in ensuring the reliability of these instruments. The impact of this offence is usually confined to the private parties involved in commercial transactions.

(2010) 5 SCC 663

14 The Hon'ble Supreme Court in M/s. Gimpex (P) Ltd. Vd. Manoj

Goeal 7 held as follows:

Allowing prosecution under both sets of complaints would be contrary to the purpose of the enactment. As noted above, it is the compensatory aspect of the remedy that should be given priority as opposed to the punitive aspect. The complainant in such cases is primarily concerned with the recovery of money, the conviction of the accused serves little purpose. In fact, the threat of jail acts as a stick to ensure payment of money. This Court in R. Vijayan v. Baby 8 emphasised how punishment of the offender is of a secondary concern for the complainant in the following terms:

"17. The apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation Under Section 357(1)(b) of the Code. Though a complaint Under Section 138 of the Act is in regard to criminal liability for the offence of dishonouring the cheque and not for the recovery of the cheque amount (which strictly speaking, has to be enforced by a civil suit), in practice once the criminal complaint is lodged Under Section 138 of the Act, a civil suit is seldom filed to recover the amount of the cheque. This is because of the provision enabling the court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, the cheque amount, as loss incurred by the complainant on account of dishonour of cheque. Under Section 357(1)(b) of the Code and the provision for compounding the offences Under Section 138 of the Act most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque amount. A stage has reached when most of the complainants, in particular the financing institutions (particularly private financiers) view the proceedings under Section 138 of the Act, as a proceeding for the recovery of the cheque amount, the punishment of the drawer of the cheque for the offence of dishonour, becoming secondary."

15 In the instant case, the petitioner is aged about 64 years as of

now and the complaint pertains to the year 2013. Therefore, in the

light of the judicial precedent laid down by the Hon'ble Supreme

(2022) 11 SCC 705

(2012) 1 SCC 260

Court in the above case, I am of the considered view that instead of

sentencing the petitioner to imprisonment, to meet the ends justice,

the petitioner may be directed to pay compensation to the second

respondent.

16 Accordingly this criminal revision case is dismissed. However,

instead of committing the petitioner to prison, the petitioner is

sentenced to pay Rs.2,50,000/- as compensation to the second