Dishonour of a cheque issued towards a business liability constitutes an offence under Section 138 of the Negotiable Instruments Act. The court may consider payments made by the accused exceeding the cheque amount in determining the appropriate punishment.

(This Criminal Revision is filed under Section 401 read with 397 of Criminal Procedure Code against the Judgment of III Additional Judge, City Civil Court, Chennai in C.A.No.262/2003 dated 29.01.2004 confirming the sentence and fine and setting aside the compensation of Rs.11,00,000/-, as ordered by the XVIII Metropolitan Magistrate, Saidapet in C.C.No.4851 of 1996 dated 7.8.2003.)

The revision petitioners are A1 and A2 in C.C.No.4851 of 1996 on the file of XVIII Metropolitan Magistrate Court, Saidapet, Chennai-15. They were found guilty for the offence punishable under Section 138 of the Negotiable Instruments Act imposing fine of Rs.5,000/- to the first accused payable by the second accused, in default to undergo three months simple imprisonment and convicting and sentencing the second accused to undergo one year simple imprisonment. It is further directed to pay a sum of Rs.11,00,000/- as compensation to the de facto complainant, as per the judgment dated 07.08.2003. In Crl.A.No.262 of 2003 on the file of III Additional Sessions Court, Chennai, the above conviction and sentence were confirmed setting aside the order of compensation of Rs.11,00,000/-, as per the judgment dated 29.1.2004.

2. The case of the complainant/respondent is that they are carrying on business in exporting cashew kernels and they used to place orders against the export orders on local manufacturing and processing companies for the same. One such company is the first accused. The complainant used to give advance payment for procurement and processing of cashew nut by way of demand draft in the course of business. During such course of business, the revision petitioners, who are A1 and A2 got orders from the complainant for procurement and processing of cashew nut, for which the complainant had advanced Rs.14 lakhs, of which Rs.10 lakhs had been given to the first accused by way of demand draft bearing No.012771 dated 5.2.96. The first accused was unable to procure and process the required raw nuts at Panruti in time to the complainant, during this transaction and so the second accused, being a partner, had issued a cheque in favour of the complainant bearing No.433203 dated 25.3.1996 for Rs.10 lakhs. The complainant had presented the cheque in the bank on 31.3.1996 and the same was dishonoured due to insufficiency of funds and the same was intimated to the complainant by its bank on 19.4.1996. Then, the second accused requested the complainant to present the cheque once again in the end of June and when the cheque was presented, it was dishonoured due to insufficiency of funds. After the repeated dishonoured of cheque, the complainant had sent a registered lawyer's notice dated 9.7.1996 to the accused. But the accused had not made payment. Hence, the complainant herein has filed a private complaint against the accused for an alleged offence under Section 138 of the Negotiable Instruments Act.

3. The complainant examined himself as P.W.1 and marked Exs.P-1 to P-21. The bank managers have been examined as P.Ws.2 and P.W.3 and the Andhra Bank Officer has been examined as P.W.4. The A2 examined himself as D.W.1 and marked Exs.D-1 to D-5.

4. Considering the evidence let in on the prosecution side, viz., P.Ws.1 to 4 and Exs.P-1 to P-21 marked on the side of the prosecution, the Judicial Magistrate found both the accused guilty and convicted and sentenced the revision petitioners as set out above for the offence under Section 138 of the Negotiable Instruments Act. Against the order of the learned Magistrate, the revision petitioners/A1 and A2 preferred an appeal before the III Additional Judge, City Civil Court, Chennai in Criminal Appeal No.262 of 2003 and after due enquiry, the learned Judge was pleased to confirm the order of trial Court in respect of the conviction and sentence and set aside the order of trial court in respect of payment of compensation. Such conviction and sentence as confirmed by the first appellate Court is now under challenge i