IMPORTANT POINTS
(1) Scope of interference in an appeal against acquittal is limited.
(2) Adjudication in civil matters is based on preponderance of probabilities whereas adjudication in criminal cases is based on principle that accused is presumed to be innocent and guilt of accused should be proved to the hilt and proof should be beyond all reasonable doubts.

JUDGMENT :

B.R. GAVAI, J.

1. The Criminal Appeals challenge the common judgment and order of conviction and sentence dated 28th October 2008 and 30th October 2008 passed by the Madras High Court whereby the Appellant has been convicted under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “the N.I. Act”) and has been sentenced to a fine of Rs. 7 Lakhs in each case in respect of two cheques for an amount of Rs. 3.5 Lakhs.

2. The Civil Appeals challenge the judgments dated 08th August 2011 and 03rd February 2012 passed by the Madras High Court whereby the Original Suits filed by the plaintiff-respondents for recovery of money on the basis of promissory notes were decreed.

3. For the sake of convenience, the parties will be referred to as their status before this Court.

4. Since both the Criminal Appeals arise out of a common judgment, we consider it apposite to refer to the facts in Criminal Appeal No.1978 of 2013. Insofar as the Civil Appeals are concerned, while they arise out of different judgments, for the sake of convenience, we shall refer to the facts arising from Civil Appeal No.10501 of 2013.

5. The present appeals arise from the following factual matrix:

5.1 In 1992, the Appellant-Rajaram’s wife subscribed to a 5 year chit-fund with one Maruthachalam, the Respondent in Criminal Appeal No. 1978/2013 and Civil Appeal No.10500/2013. Upon the Respondent-Maruthachalam’s persuasion that, in order to be a successful bidder, a security by way of a blank cheque must be submitted, the Appellant submitted two signed blank cheques bearing nos. 237954 and 237956 on behalf of his wife, since she did not have a bank account. It is to be noted that the cheques were drawn on the account of M/s Brinda Engineering, the sole proprietorship concern of the Appellant, maintained with the Laxmi Vilas Bank Ltd.

5.2 It is further the case of the Appellant that in 1995, his wife subscribed to yet another 5year chit-fund with the Respondent-Maruthachalam.

5.3 In 1997, the bank account on which the said cheques were drawn was closed due to non-operation.

5.4 The first chit matured in 1997 and, since the wife of the Appellant was never a successful bidder, thus, the Appellant and his wife repeatedly requested the Respondent to release the amount of the chits, but the Respondent never did so. On the contrary, the Respondent promised to keep the amount as a deposit and pay interest. Similarly, the second chit matured in 1999, whereafter also the wife of the Appellant was never a successful bidder. Thereafter, repeated requests for releasing the subscription amount to the tune of Rs. 6 lakhs for both the chits were made on their behalf, but to no avail. Finally, the Appellant and his wife threatened the Respondent with legal action, whereupon the Respondent immediately presented the cheques for encashment without any information or intimation to the Appellant.

5.5 The Cheque No. 237954 was dated 20th October 1999 in favour of Respondent-Nachimuthu (who happens to be the brother-in-law of Maruthachalam) for an amount of Rs. 3,50,000/, and was presented for encashment on 04th November 1999 by the Respondent through his banker Indian Overseas Bank. The said cheque returned unpaid on 14th November 1999 with an endorsement stating “account closed”.

5.6 The other Cheque No. 237956 was dated 25th October 1999 in favour of the Respondent-Maruthachalam for an amount of Rs. 3,50,000/, and was presented for encashment on 04th November 1999 by the Respondent through his banker Indian Overseas Bank. The said cheque too returned unpaid on 14th November 1999 with an endorsement stating “account closed”.

5.7 Statutory Notices dated 15th November 1999 were sent in respect of the aforesaid dishonoured cheques, which were duly replied by the accused/Appellant denying the existence of any legally enforceable debt and stating therein that the Respondent is liable to pay the chit amount along with subsequent interest. Since the amount was not paid, the R