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2007(4) Crimes 189 (A.P.)
ANDHRA PRADESH HIGH COURT
M. Venkateswara Reddy, J.
Charminar Co-operative Urban Bank Ltd., Hyderabad —Appellant
versus
M/s Chaithanyakala Samithi, President
and Secretary & Ors. —Respondents
Criminal Appeal No. 580 of 2002.
Decided on 2-4-2007
Held: There can be no dispute that the transaction is an in-house transaction. Whether the clerk dealing with the loan transaction D.L. 89/98 and the clerk passing the cheques and making payment is one and the same is not known. Ex. P9 return memo bears the date 7.6. 1999, that means it can be taken for granted that all the cheques were presented for encashment to the clerk passing and making the payments on 7.6.1999. As he found that the funds were insufficient, he returned those cheques under Ex. P9 return memo. Ex. P9 memo implies that the cheques were presented for payment/adjustment. if Ex. P9 return memo is not there on record, I would have straightaway accepted the contention of the learned counsel for the accused that there was no presentation of the cheques. But in the teeth of Ex. P9, does it lie in the mouth of the learned counsel for the accused to say that there is no due or valid presentment? (Para 15)
As already pointed out, no provision is shown to me either under the Act or any other banking laws where in an in-house transaction of this type where a return memo followed, the signature of the Manager or the Clerk concerned in token of having it presented for payment is necessary. As already stated, the presentment is implicit in the cheque return memo Ex. P19. Therefore, for the foregoing reasons, I am of the firm view that there was proper presentment of the cheques and the finding of the trail Court that there was no presentment is not sustainable. (Para 18)
(ii) Negotiable Instruments Act, 1881—Section 138—Prosecution for dishonour of cheque—Amount mentioned in cheque should be payable to “another person” —Self cheque is not covered under the provision—Cheque was drawn by respondent accused mentioning loan account No.—Defence contention that since “another person” was described as “DL account No. 89/98”, account could not be treated as a person—It was an “in-house transaction” and amount was to be adjusted by complainant bank from current account of loan account—Payee could be identified specifically as loan account specified creditor or payee as complainant bank—Acquittal in given facts could not be sustained. (Paras 22 and 23)
(iii) Negotiable Instruments Act, 1881—Section 87 and 138—Dishonour of cheque—Defence plea of material alteration in cheque—Column relating to payee was filled up later —However it was in furtherance of common intention and particulars of payee came to be inserted—There could not be said to be material alteration. (Paras 26 and 27)
Result: Appeal allowed.
JUDGMENT
M. Venkateswara Reddy, J.—Aggrieved of the acquittal of accused Nos. 1 to 3 of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘the Act’) by the XVI Metropolitan Magistrate, Hyderabad, by his judgment dated 20.11.2001, in CC No. 38 of 1999, the complainant-the Charminar Co-operative Urban Bank Limited, Purani Haveli Branch, Hyderabad represented by Special Power of Attorney-Recovery Officer, preferred this appeal.
2. Admitted facts of the case are that accused No. 1 M/s Chaithanya Kala Samithi, of which accused No. 2 is the Secretary and accused No. 3 is the President, availed an amount of Rs. 99 lakhs towards loan granted by the complainant bank. As per the terms and conditions of the loan agreement Ex. P19, the amount is payable in 35 equal monthly installments of Rs. 3,75,000 each. Accused No. 1-M/s Chaithanya Kala Samithi issued 35 post-dated cheques towards the repayment of the loan. As per the complainant Bank, the cheques bearing Nos. 049494, 049451, 049485, 049452, 049453, 049454 marked as Exs. P3 to P8 respectively were dishonoured. Therefore, the complainant Bank got issued a legal notice under Ex. P10 to all the three accused. They received the same under Exs. P15 to P17 acknowledgements. The postal receipts of accused Nos. 1 to 3 were also marked as Exs. P11 to P13. Despite Ex. P10 notice, the accused failed to pay the amount. Hence, the complaint was filed by the Bank.
3. On behalf of the bank, its Manager (Recovery Officer) was examined as PW1 and he deposed to the facts stated in the complaint and Exs. P1 to P 21 were marked. The accused had not chosen to adduce any evidence on their behalf.
4. On consideration of the evidence and the other material placed before it, the trial Court acquitted all the accused on two grounds viz., that the complainant failed to prove that the cheques Exs. P3 to P8 were presented for encashment and it also failed to prove that the accused fell due of the payment of installments by the date of the said cheques.
5. The learned counsel for the appellant Bank contends that both the findings of the lower Court are not correct.
6. On the other hand, the learned counsel for the respondents/accused defended both the findings of the lower Court, in addition to it he also raised the following points:
(a) the complainant Bank does not fall within the ambit of the word “another person” employed in Section 138 of the Act?
(b) All the cheques were given only as security for the discharge of the loan amount and therefore, Section 138 of the Act cannot be invoked?
(c) The accused gave signed blank cheques, which were filled up later and therefore, the same would amount to material alteration?
7. In the teeth of the rival contentions, the points that arise for consideration are:
(1) Whether there is proper presentment of the cheques for payment?
(2) Whether the installment amounts had not fallen due by the date of presentment of the cheques and as such there was no enforceable debt or liability by the date of presentment?
(3) Whether the complainant Bank does not fall within the ambit of the word “another person” employed in Section 138 of the Act?
(4) Whether all the 35 cheques including the 6 cheques, Ex. P3 to P8, were given as security, only for the discharge of the loan amount?
(5) Whether there is material alteration?
8. Point No. 1, Presentation. The maker of all the 6 cheques i.e. the drawer is accused No. 1. These cheques were signed by both Accused No. 2 and 3 in their capacity as Secretary and President respectively of accused No. 1, the payee, as noted in the first 5 cheques is as under:
“D.L. 89/98”
9. In Exs. P3, P5, P6 and P7, the word (DL) is added to the description of the payee. The same is not added in Ex. P4. Coming to Ex. P8, the words ‘D.L.’ only find place as the Payee, but the account “89/98” was not incorporated therein. Whether the words ‘D.L.89/98’ fall within the scope and ambit of the expression “any person” occurr
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