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2012 Supreme(Mad) 2461

High Court of Judicature at Madras
C.S. KARNAN
K. Suresh
Versus
M. Krishnasami & Another
CRL. R.C. NO. 334 OF 2005 & 123 OF 2006
Decided on: 15-06-2012

Advocates Appeared:
For the Petitioner:AL. Gandhimathi, Advocate.
For the Respondents: No Appearance.

The central legal point established in the judgment is the strict application of Section 138 of the Negotiable Instruments Act, emphasizing the need for evidence of debt and the consequences of dishonor of a cheque.

Headnote:

Negotiable Instruments Act - Cheque Bounce - Section 138 - Summary of Acts and Sections: The court discussed the provisions of Section 138 of the Negotiable Instruments Act and its application in the case. The court emphasized the requirement of proving the existence of debt and the dishonor of the cheque due to insufficient funds. The court also highlighted the consequences of non-payment and the imposition of compensation.

Fact of the Case:

The accused borrowed a sum of Rs.9,00,000 for movie production but failed to repay the loan, leading to the complainant filing a complaint under Section 138 of the Negotiable Instruments Act for dishonor of a cheque issued as repayment.

Finding of the Court:

The court found the accused guilty of the offence under Section 138 of the Negotiable Instruments Act and imposed a fine and compensation. The appeal against the conviction and sentence was dismissed, and the revision petitioner sought an increase in compensation.

Issues: The key issues involved the dishonor of the cheque, existence of debt, and the liability of the accused under Section 138 of the Negotiable Instruments Act.

Ratio Decidendi: The court held that the accused's failure to prove the cheque was given as security and the absence of evidence regarding the loan repayment justified the conviction under Section 138. The court also emphasized the need for proper documentation to establish the existence of the loan.

Final Decision: The court modified the compensation amount, directing the second accused to pay additional compensation and setting aside the compensation imposed on the first accused. The judgment and conviction were modified, and the order dismissing the petition to withdraw compensation was set aside.

Judgment :-

1. The revision petitioner herein / respondent / complainant has preferred the Criminal Revision in Crl.R.C.No.334 of 2005 against the order of conviction and sentence dated 16.12.2004 in C.A.No.97 of 2003, on the file of the Principal Sessions Judge, Chennai, confirming the order of conviction of sentence dated 04.03.2003 in C.C.No.8325 of 2003 on the file of XVII Metropolitan Magistrate, Saidapet.

2. The complainant's case is as follows:- The accused 1 and 2 have borrowed a sum of Rs.9,00,000/- from the complainant, for production expenses of the movie "Vannath Tamizh Pattu", and had promised to repay the said loan, before the release of the movie. But as they did not repay the loan even after release of the movie, the complainant had demanded them to make the payment. The second accused had issued a cheque dated 06.09.2000, drawn on Andhra Bank, T.Nagar Branch, for a sum of Rs.9,00,000/-, in favour of the complainant. The complainant presented the said cheque for encashment with his banker, namely, Bank of Baroda, T.Nagar Branch on 07.09.2000, but it was returned unpaid on 09.09.2000, due to insufficient funds in the account of the accused. The complainant issued a lawyer's notice to the accused on 18.09.2000 by registered post, but the accused had refused to receive it. Subsequently, the said notice was received by the accused on 20.09.2000 but they had neither replied to the notice nor paid the said amount. Hence, the complainant had preferred a complaint under Section 138 of Negotiable Instruments Act against the accused before the XVII Metropolitan Magistrate, Saidapet.

3. The accused pleaded not guilty before the trial Court and hence enquiry was initiated.

4. On the side of the complainant, three witnesses were examined and ten documents were marked as Exs.P1 to P10. On the accused side, no witness was examined but nine documents were marked as Exs.R1 to R9.

5. P.W.1, Suresh had adduced evidence that the first accused is the proprietor of "Aishwarya Combines"; that the second accused is his son and is the power of attorney holder of the first accused; that both the accused had borrowed a sum of Rs.9,00,000/-from him, in order to produce a movie titled "Vanna Tamizh Pattu"; that in order to repay the said amount, the second accused had issued a cheque dated 06.09.2000 (EX.P1) drawn on Andhra Bank, T.Nagar Branch; that he presented the said cheque with his banker, namely, Bank of Baroda, T.Nagar Branch, on 07.09.2000 for encashment; that it was returned unpaid on 11.09.2000 with the endorsement of "insufficient funds" in the account of accused through return memo marked as Ex.P2; that the debit advice for the return of cheque, sent by his bank has been marked as Ex.P3; that a lawyer's notice (Ex.P4) was sent to the accused on 18.09.2000; that the postal receipt for sending the notice has been marked as Ex.P5; that as the said notices were not received by both the accused, it was returned and that the returned covers had been marked as Exs.P6 and P7; that the notice was sent by certified copy of posting and the postal receipt for the same has been marked as Ex.P8.

6. The Officer of Andhra Bank, T.Nagar Branch, Wilson was examined as P.W.2. P.W.2 had deposed evidence that the authorization letter issued by his bank empowering him to adduce evidence has been marked as Ex.P9; that the accused had an account in their bank; that when the impugned cheque came for encashment in their bank on 09.09.2000, the balance amount in the account of the accused was only Rs.2,109/-; that due to this, the impugned cheque was returned unpaid; that the copy of the bank account statement of accused has been marked as Ex.P10.

7. The Technical manager of Bank of Baroda, T.Nagar Branch was examined as P.W.3. P.W.3, in his evidence deposed that the complainant had a savings account, in their bank; that the complainant had deposited the said impugned cheque in their bank and that it was returned unpaid due to insufficient funds in















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