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2017 Supreme(Mad) 3221
IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.N. PRAKASH, J.
N. Palanisamy - Appellant
Versus
Sri Maruthi Processors a registered firm by its partner, R. Palanisamy, Tiruchengode & Others - Respondents
Crl.A. No. 465 of 2012
Decided On : 13-12-2017
For the Appellant :N. Manokaran, Advocate.
For the Respondents:I.C. Vasudevan, Advocate.
The main legal point established in the judgment is the presumption in favor of the holder of a dishonored cheque under Section 139 of the Negotiable Instruments Act, placing the burden of proof on the accused.
Headnote:
Acquittal - Negotiable Instruments Act - Section 138 - 138, 139, 141, 147 - The court discussed the provisions of the Negotiable Instruments Act, particularly Sections 138, 139, 141, and 147, and their interpretations in the context of establishing liability for dishonored cheques. The court emphasized the presumption in favor of the holder of a cheque and the burden of proof on the accused to discharge the same. The judgment also highlighted the requirement to establish vicarious liability under Section 141 and the possibility of compounding the offense under Section 147.
Fact of the Case:
The complainant alleged that the accused borrowed a sum of money and issued a cheque that was subsequently dishonored. The trial court convicted the accused, but the appellate court acquitted them based on the lack of proof regarding the partners of the firm and their authorization to issue the cheque.
Finding of the Court:
The court found that the appellate court's acquittal was based on an erroneous interpretation of the law and failed to consider the presumption in favor of the holder of the dishonored cheques. The court also noted the failure to establish vicarious liability for one of the accused.
Issues: The issues revolved around the proof of liability for dishonored cheques, the requirement to establish the partners' authority in a firm, and the potential for compounding the offense.
Ratio Decidendi: The court held that the presumption in favor of the holder of a dishonored cheque, as per Section 139 of the Negotiable Instruments Act, places the burden of proof on the accused. It also emphasized the need to establish vicarious liability under Section 141 and the possibility of compounding the offense under Section 147.
Final Decision: The appellate court's acquittal was set aside, and the trial court's judgment was partly restored. One accused was acquitted, while another was convicted and sentenced, with the option to compound the offense by depositing the due amount.
1. This appeal has been filed against the order of acquittal dated 15.07.2011 passed in C.A.No.158 of 2010 by the learned Additional District and Sessions Court/Fast Track Court No. IV, Bhavani .
2. For the sake of convenience, the appellant and the respondents will be referred to as the complainant and the accused.
3. It is the case of the complainant that on 25.10.2007, the second accused borrowed Rs.4 lakhs for the business purpose of the first accused partnership firm and had executed a promissory note for the said sum, agreeing to repay the amount with interest at 12% per annum on demand. Towards the debt, R. Palanisamy [A2], in the capacity of partner of Sri Maruthi Processors [A1], gave a cheque dated 03.12.2008 from the account of Sri Maruthi Processors [A1] for Rs.4 lakhs (Ex.P.2), which was presented by the complainant on 17.12.2008 for collection through his Bank, viz., Bank of Baroda, Bhavani Branch. However, the said cheque was returned to the complainant unpaid on 19.12.2008 along with a memo dated 18.12.2008 (Ex.P.3) from the Karur Vysya Bank (bank of the accused) on the ground "opening balance insufficient".
4. On 26.12.2008, the complainant issued individual statutory notice s calling upon the accused to make the payment. The said notices were returned as "door locked, intimation given not claimed". The complainant initiated a prosecution in S.T.C.No.2320 of 2009 under Section 138 of the Negotiable Instruments Act against Sri Maruthi Processors [A1], R. Palanisamy [A2] and Kamalam [A3] and the trial was held before the Judicial Magistrate, Bhavani.
5. On the appearance of the accused, they were questioned about the substance of the accusation against them, which they denied. The complainant examined himself as P.W.1 and marked 7 exhibits. The accused were questioned about the incriminating circumstances appearing against them under Section 313 Cr.P.C., which they denied. The accused did not adduce any evidence nor did they mark any exhibit.
6. After hearing either side and considering the evidence on record, the trial Court, by judgment dated 19.11.2010, convicted all the three accused under Section 138 of the Negotiable Instruments Act and sentenced them to undergo one year Simple Imprisonment and pay a compensation of Rs.4 lakhs jointly or severally, to the complainant under Section 357 Cr.P.C. Of course, the trial Court has committed an error in awarding a sentence of imprisonment to Sri Maruthi Processors [A1], which is only a juristic entity. That by itself will not vitiate the entire proceedings. Aggrieved by the conviction and sentence, the accused filed Crl.A.No.158 of 2010 in the Sessions Court, Erode District, which was heard by the learned Additional District and Sessions Judge, Fast Track Court No. IV, Bhavani, Erode District, who, by order dated 15.07.2011, allowed the appeal and acquitted the accused. Challenging the acquittal, the complainant is before this Court after obtaining special leave under Section 378(4) Cr.P.C.
7. Heard the learned counsel for the complainant and the learned counsel for the accused.
8. Before going into the rival submissions, it would be necessary to extract the following passage from the judgment of the Supreme Court in Arulvelu and another vs. State rep. by the Public Prosecutor and another [(2009) 10 SCC 206].
"36. Careful scrutiny of all these judgments lead to the definite conclusion that the appellate court should be very slow in setting aside a judgment of acquittal particularly in a case where two views are possible. The trial court judgment can not be set aside because the appellate court's view is more probable. The appellate court would not be justified in setting aside the trial court judgment unless it arrives at a clear finding on marshalling the entire evidence on record that the judgment of the trial court is either perverse or wholly unsustainable in law."
9. N. Palanisamy [P.W.1] the complainant herein, filed his proof affidavit before the trial Cour
