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High Court of Judicature at Madras
R. MALA
Gunasekaran
Versus
M.P. Thangavel
CRIMINAL APPEAL NO. 1218 OF 2004
Decided on : 12-07-2012
Negotiable Instruments Act - Cheque issuance for discharge of debt - Section 138 - 138(b) - 118 - 139
Fact of the Case:
The appellant filed a private complaint under Section 138 of the Negotiable Instruments Act, alleging that the respondent issued a cheque for Rs.5,00,000 which was returned due to insufficient funds. The trial court acquitted the respondent, concluding that the cheque was not issued to discharge a legally enforceable debt.
Finding of the Court:
The court found that the appellant failed to prove that the cheque was issued to discharge a legally enforceable debt, as the respondent had repaid the advance amount and the sale agreement was revoked. The court also noted discrepancies in the appellant's evidence and upheld the trial court's decision of acquittal.
Issues: The main issue was whether the cheque was issued to discharge a legally enforceable debt, and whether the appellant provided sufficient evidence to prove the same.
Ratio Decidendi: The court held that the appellant failed to prove that the cheque was issued for a legally enforceable debt, as the respondent had repaid the advance amount and the sale agreement was revoked. The court also considered discrepancies in the appellant's evidence.
Final Decision: The criminal appeal was dismissed, and the judgment of acquittal passed by the trial court was confirmed.
1. The criminal appeal arises out of the judgment of acquittal dated 10.09.2004, made in C.C.No.808 of 2002, on the file of the Judicial Magistrate's Court, Thiruchengode.
2. The appellant as a complainant preferred a private complaint under Section 138 of Negotiable Instruments Act, stating that the respondent/accused borrowed a sum of Rs.5,00,000/- for his business purpose on 23.04.2002 and issued Ex.P1 cheque of Chithode Farmer's Service Co-operative Society Ltd., bearing No.11754, dated 23.04.2002 for Rs.5,00,000/-. When the above cheque has been presented for encashment before the Indian Overseas Bank on 20.06.2002, it was returned as 'insufficient funds' on 25.06.2002. Challan and counter foil of Indian Overseas Bank was marked as Ex.P2 and the return memo was marked as Ex.P3. Debit Advice from Chithode Lakshmi Vilas Bank was marked as Ex.P4. On 29.06.2002, the complainant issued a statutory notice to the respondent under Ex.P5 and return cover was marked as Ex.P6. The respondent herein knowing fully well that there was no sufficient funds in his account, issued a cheque and thereby committed offence under Section 138 of Negotiable Instruments Act.
3. The learned Magistrate after considering oral and documentary evidence acquitted the accused/respondent stating that the cheque was not issued by the respondent for discharging legally enforceable debt and that has been issued for the purpose of executing sale deed with the complainant. As per Ex.D1/sale agreement, on 24.04.1998, the respondent received advance of Rs.90,000/- from the complainant and that has been repaid and Ex.D1 sale agreement has been revoked on 15.02.1999 as per Ex.D2/revocation deed. At the time, the complainant has executed an indemnity bond stating that the cheque given by the respondent has been misplaced and he would not be misused the same. Thereby the trial Court came to the conclusion that the said cheque has been misused by the appellant/complainant for this purpose and hence, the trial Court dismissed the complaint, against which, the present appeal has been preferred by the appellant/complainant.
4. Learned counsel for the appellant/complainant submitted that since issuance of cheque is admitted by the respondent, the complainant is entitled to invoke presumption under Sections 118 and 139 of Negotiable Instruments Act. But the trial Court has not considered the above aspect. Hence, he prayed for setting aside the order of acquittal.
5. Even though notice was served to the respondent, the respondent is neither entered his appearance in person nor through his counsel.
6. Considered the submissions made by the learned counsel for the appellant and perused the materials available on record.
7. The appellant as a complainant preferred a private complaint stating that he lent money to the respondent/accused on 23.04.2002 for Rs.5,00,000/- and on the date itself, the complainant received a cheque for Rs.5,00,000/-, which was evidenced by Ex.P1. When the cheque was deposited into the Bank for encashment on 20.06.2002, it was returned as 'insufficient funds' on 25.06.2002 and the same was intimated to the complainant on 27.06.2002. Ex.P2 Challan and counter foil of Indian Overseas Bank shows that Rs.800/- has been deposited, which is not relevant to this case. Ex.P3 is a return memo, which shows that 'insufficient funds' in the account of the respondent. Ex.P4 is the debit advice of Chithode Lakshmi Vilas Bank, which is dated 25.06.2002. Ex.P5 is the statutory notice issued by the complainant to the respondent on 29.06.2002. Ex.P6 is the cover which returned to the sender as 'not claimed'.
8. Admittedly, Ex.P1 cheque has been returned as 'insufficient funds'. Therefore, the appellant had issued statutory notice to the respondent within the stipulated time. Since the notice was not claimed by the respondent, as per the dictum of the Apex Court, the notice is presumed to be valid notice under Section 138(b) of Negotiable Instruments Act
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