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2014 Supreme(Mad) 4380
High Court of Judicature at Madras
R.S. RAMANATHAN, J.
S. Duraisamy
Versus
R. Shanmugam
Criminal Appeal No. 938 of 2007
Decided On : 18-12-2014
For the Appellant:R. Shanmugasundaram, Senior Counsel for L. Baskaran, Advocate.
For the Respondent:P. Suresh, Advocate.
The main legal point established in the judgment is the burden of proof on the drawer to prove discharge of liability under Section 138 of the Negotiable Instruments Act and the standard for rebuttal of the presumption of consideration under Sections 118 and 139.
Headnote:
Negotiable Instruments Act - Discharge of Liability - Sections 138, 118, 139 - Summary of Acts and Sections: The court discussed the presumption of consideration under Sections 118 and 139 of the Negotiable Instruments Act and the burden of proof on the drawer to prove discharge of liability under Section 138. Key legal provisions such as the presumption of consideration, burden of proof, and standard for rebuttal were highlighted and influenced the court's decision.
Fact of the Case:
The appellant filed a complaint under Section 138 of the Negotiable Instruments Act against the respondent for dishonor of cheques. The respondent claimed to have discharged the amount and presented evidence to support his claim.
Finding of the Court:
The court found that the respondent failed to prove the discharge of the debt and set aside the trial court's acquittal, holding the respondent guilty under Section 138 of the Negotiable Instruments Act.
Issues: The main issue was whether the respondent successfully proved the discharge of the debt, as claimed, and rebutted the presumption of consideration under the Negotiable Instruments Act.
Ratio Decidendi: The court emphasized the burden of proof on the drawer to prove discharge of liability and the standard for rebuttal of the presumption of consideration under Sections 118 and 139 of the Negotiable Instruments Act.
Final Decision: The court allowed the appeal, set aside the trial court's finding, and held the respondent guilty under Section 138 of the Negotiable Instruments Act.
R.S. RAMANATHAN, J.
1. The complainant in C.C. No. 192 of 2005 on the file of the Judicial Magistrate – V, Coimbatore is the appellant. The appellant filed the above complaint under Section 138 of the Negotiable Instruments Act against the respondent and the learned Judicial Magistrate dismissed the complaint and acquitted the respondent and aggrieved by the same, this Appeal is filed.
2. The case of the appellant/complainant is that the respondent was running a chit fund and he was a member and the respondent was having money transaction with him and in July 2003, the respondent borrowed a sum of Rs. 2,00,000/- and on 1.9.2003, another sum of Rs. 2,00,000/- from him and agreed to repay the said amount with interest at the rate of Rs. 2/- per month and was paying interest for some time and thereafter neither repaid the principal nor the interest and after demand, he issued four post-dated cheques each for Rs. 1,00,000/- and 2 chques were drawn on State Bank of India and 2 cheques were drawn on Indian Overseas Bank. When these two cheques were presented for collection, all the four cheques were returned with an endorsement insufficient funds and thereafter, notice was issued on 4.11.2004 and the notice was returned as refused and therefore, the complaint was filed.
3. The cheques were marked as Exs.P.1 to P.4, returned memo as Exs.P.5 to 8, debit advises were marked as Exs.P.9 and 10 and the notice was marked as Ex.P.11 and returned cover was marked as Ex.P.12. The complainant examined himself as PW.1 and the respondent examined 4 witnesses and also gave statement.
4. Before the trial Court, the respondent pleaded discharge of the amount payable by him by marking Ex.D.3 and to prove the discharge, he examined DW.3 and DW.4 and the trial Court believed the evidence of DW.3 and DW.4 and held that through Ex.D.3 and evidence of DW.3 and DW.4, the respondent proved that the amount was discharged and therefore, the respondent is liable to be acquitted and acquitted the respondent.
5. It is submitted by the learned Senior Counsel for the appellant that the respondent admitted the issuance of 4 chques for the amount borrowed by him and he pleaded discharge through Ex.D.3 and DW.3 and DW.4 and in Ex.D.3, the signature is admitted by the appellant but the appellant denied the contents and DW.3 and DW.4 are not the residents of Coimbatore or persons known to the respondent and the presence of DW.3 and DW.4 on the payment date for having witnessed the repayment of Rs. 4,48,000/- by the respondent also appears to be doubtful and Ex.D.3 also not admissible in evidence as it was not duly stamped. Therefore, the trial Court ought not to have relied upon Ex.D.3 and ought to have eschewed the said document. He further contended that it the instrument is not duly stamped, it cannot be received in evidence and relied upon the judgments reported in Yasodammal vs. Janaki Ammal, 81 L.W. 2 and Hindustan Steel Ltd. vs. Messers Dilip Construction Company, 1969 (1) SCC 597, in support of his contention.
6. He further submitted that notice was properly issued to the correct address of the respondent and under Section 27 of the General Clauses Act, presumption can be drawn when the notice was sent to correct address and there was sufficient compliance of section 138 of the N.I. Act. Therefore, the respondent was aware of the notice and deliberately, he did not send any reply. The learned Senior Counsel also relied upon the judgments reported in C.C. Alavi Haji vs. Palapetty Muhammed and Another, (2007) 6 SCC 555 and Hiten P. Dalal vs. Bratindranath Banerjee, 2001 SCC (Cri) 960.
7. Per contra, the learned counsel for the respondent submitted that the respondent not only rebutted the presumption but also proved through Ex.D.3 and DW.3 and DW.4 that the liability was discharged and the appellant has also executed receipt Ex.D.3 for having received Rs. 4,48,000/- and the signature in Ex.D.3 was also admitted by the appellant and the execution of
