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2011 Supreme(Mad) 2463
High Court of Judicature at Madras
R. MALA
K. Balu
Versus
R. Ramesh
CRL. R.C. No. 1970 of 2007
Decided On: 29-04-2011
For the Petitioner:A. Chidambaram for B. Manimaran, Advocates.
For the Respondent:D. Jaganathan, Advocate.
The presumption under Sections 118 and 139 of the Negotiable Instruments Act is rebuttable, and the accused must raise a proper defense to rebut the presumption.
Headnote:
Negotiable Instruments Act - Conviction under Section 138 - Ex.P1, Ex.P2, Ex.P3, Ex.P4, Ex.P6, Ex.P8, Ex.P9 - The court confirmed the conviction and compensation under Section 138 of the Negotiable Instruments Act. The accused was sentenced to undergo six months' simple imprisonment and to pay a compensation of Rs.20,00,000 to the complainant within three months.
Fact of the Case:
The accused borrowed Rs.20,00,000 for producing a film and issued two cheques for Rs.10,00,000 each, which were dishonored. The complainant filed a complaint under Section 138 of the Negotiable Instruments Act.
Finding of the Court:
The court found that the cheques were issued for discharging a legally enforceable debt and that the accused failed to rebut the presumption under Sections 118 and 139 of the Negotiable Instruments Act. The court also noted that the accused did not reply to the statutory notice or repay the amount, confirming the guilt under Section 138.
Issues: The main issue was whether the accused's defense that the cheques were given as security for a loan borrowed by another person was valid.
Ratio Decidendi: The court held that the promissory notes and cheques were issued for discharging a legally enforceable debt, and the accused failed to rebut the presumption under the Negotiable Instruments Act. The court also emphasized that the accused's failure to reply to the statutory notice and the existence of a memorandum of understanding supported the conviction.
Final Decision: The Criminal Revision was dismissed, and the conviction and compensation under Section 138 of the Negotiable Instruments Act were confirmed. The accused was directed to deposit the compensation amount of Rs.20,00,000 within three months.
1. The criminal revision arises out of the judgment of conviction and sentence, dated 06.12.2007, in C.A.No.4/2007, passed by the learned VI Additional Sessions Judge, Chennai, whereby the accused was convicted for the offence under Section 138 of Negotiable Instruments Act and sentenced to undergo simple imprisonment for six months and to pay a compensation of Rs.20,00,000/- to the complainant within three months, in default, to undergo three months' simple imprisonment, confirming the judgment of conviction and compensation, but modifying the sentence (i.e.) reducing the sentence from two years into six months, dated 11.12.2006 in C.C.No.2446/2001 passed by the learned XVIII Metropolitan Magistrate, Saidapet, Chennai-15.
2. The case of the respondent/complainant is that the petitioner/accused, who is the proprietor of M/S.K.B.Films, approached the respondent/complainant and borrowed a sum of Rs.20,00,000/- for the purpose of producing Tamil film and executed the promissory notes under Ex.P1 series. Towards the discharge of said liability, the accused issued Exs.P2 and P3 two cheques bearing Nos.178559 and 178558, dated 11.09.2000 and 12.09.2000, for Rs.10,00,000/- each. When the cheques were presented in the Bank for encashment, they returned on 20.02.2001 as "Funds insufficient" and the return memo was marked as Ex.P4. Thereafter, the complainant issued a statutory notice Ex.P6 to the accused on 05.03.2001 and received the same by the accused on 09.03.2001 as per Ex.P8 acknowledgement card. The accused neither sent any reply to the notice nor repaid the amount. Hence, the respondent/complainant constrained to file a complaint against the petitioner/accused under Section 138 of Negotiable Instruments Act.
3. The trial Court, after following the procedure and examining the witnesses P.W.1 and D.W.1 and perused the documentary evidence under Exs.P1 to P9, convicted the accused under Section 138 of Negotiable Instruments Act and sentenced him to undergo simple imprisonment for two years and to pay a compensation of Rs.20,00,000/- to the complainant under Section 357(3) Cr.P.C. within three months, in default in payment, to undergo simple imprisonment for three months, against which, the accused preferred an appeal in C.A.No.4/2007. The learned VI Additional Sessions Judge, after hearing the arguments of both sides counsel, confirmed the conviction and compensation and modified the sentence from two years into six months simple imprisonment, against which, the accused has come forward with the present revision.
4. Challenging the said conviction and sentence, the learned counsel for the petitioner/accused submitted that the cheques and promissory notes contained the signature of the accused, but he has not given to the respondent/complainant. There is no loan transaction between both the parties. Since one Sarath Kumar, who is acting in his film, borrowed money and he handed over the said promissory notes under Ex.P1 series and cheques under Exs.P2 and P3 to the respondent/complainant. So there is no legally enforceable debt on the date of issuance of cheques under Exs.P2 and P3. Hence, the ingredients of Section 138 of Negotiable Instruments Act is not made out against the petitioner/accused. He further submitted that the respondent/complainant also filed a criminal complaint under Section 138 of Negotiable Instruments Act against the said Sarath Kumar in C.C.No.6371/2002. There was a memorandum of understanding under Ex.P9 entered into between the petitioner and the respondent herein on 06.01.2003. In view of Ex.P9, the amount of Rs.5,00,000/- has been paid and the balance amount of Rs.10,00,000/- shall be paid on or before 06.07.2003. In pursuance of clause-2 of the memorandum of understanding, the respondent/complainant has withdrawn the case in C.C.No.6371/2002, so nothing survives in the case. Hence, he prayed for the acquittal of the petitioner/accused. To substantiate his arguments, he relied upon the decisions
