IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. JAYACHANDRAN, J.
M/s. Karrthekai Trading Company, Rep. by its Proprietor K. Sengodan, Erode - Appellant
Versus
A.R. Sundar - Respondent
Criminal Revision Case No. 595 of 2017
Decided On : 16-06-2022
Negotiable Instruments Act - Cheque - 138 - 138 - 357 - Summary
Fact of the Case:
The case involves a cheque issued by the petitioner to the respondent, which was returned due to insufficient funds. The petitioner claimed that the cheque was misused by the respondent and his associates to defraud him.
Finding of the Court:
The Court found the petitioner guilty of the offence under Section 138 of the Negotiable Instruments Act and sentenced him to one year simple imprisonment and a fine of Rs.5,000. The Appellate Court confirmed the sentence and additionally awarded compensation of Rs.6,00,000.
Issues: The issues revolved around the misuse of the cheque, the validity of the loan transaction, and the authority of the Appellate Court to award compensation in the absence of an appeal by the complainant.
Ratio Decidendi: The Court held that while the Act allows for compensation to be paid from the fine amount, the Appellate Court cannot enhance the sentence by ordering compensation in the absence of an appeal by the complainant. The period of sentence was also modified based on the petitioner's financial situation.
Final Decision: The Criminal Revision Petition was partly allowed, modifying the period of sentence to six months simple imprisonment with a fine of Rs.5,000.
JUDGMENT
(Prayer: Criminal Revision Case is filed under Section 397 r/w 401 of Cr.P.C., to set aside the judgment and conviction dated 24.03.2017 made in C.A.No.30 of 2016 on the file of the III Additional District and Sessions Court, Gobichettipalayam confirming the judgment dated 28.01.2016 made in C.C.No.411 of 2007 on the file of Judicial Magistrate No.I, Gobi.)
1. The revision petition is filed against the concurrent findings of the Courts below. The subject matter of the revision is the cheque dated 26.07.2007 issued for Rs.6,00,000/- by the revision petitioner, in favour of the respondent. According to the respondent, the cheque was given by the revision petitioner to discharge the loan. On presentation, the cheques was returned for “insufficiency of fund”, hence after serving statutory notice, a complaint filed under Section 138 of Negotiable Instruments Act, 1881.
2. To prove the case, the complainant/A.R.Sundar (P.W.1) and Ranganathan (P.W.2), Postal Inspector were examined. In support of the complainant, 6 exhibits were marked.
3. On behalf of the petitioner/accused, two witnesses were examined and 9 exhibits were marked.
4. The Trial Court held the accused guilty and sentenced him to undergo one year S.I and to pay fine of Rs.5,000/- in default one month S.I.
5. Aggrieved by that, the accused preferred appeal before the III Additional District and Sessions Court, Gopichettipalayam.
6. The Appellate Court, after re-appreciation of evidence confirmed the findings of the Trial Court and dismissed the appeal. While dismissing the appeal, the Trial Court in addition awarded compensation of Rs.6,00,000/- being the value of the cheque amount.
7. Aggrieved by the concurrent findings of the Courts below, the present revision petition is filed on the ground that, the Courts below failed to take note of the fact that the statutory notice was not served to the accused. The Courts below failed to take note of the fact that the complainant, in his chief examination has stated that, Rs.6,00,000/- was borrowed by the revision petitioner on 27.05.2007. Whereas, the cheque is dated much prior to the said date i.e., 26.07.2007. This sole fact destroy the entire case of the complainant. The said discrepancy cannot be reconciled by any other evidence. Therefore, when the transaction itself is much later to the date of cheque, the Courts below ought to have believed the version of the accused that the complainant herein has misused the cheques given by the petitioner to one S.Nagarajan, Advocate who is the colleague of Natarajan Advocate, having joint office. The said Natarajan is the brother-in-law of this complainant. Nagarajan through this complainant and through his colleague Natarajan and his brother-in-law A.R.Sundar had filled up the two blank cheques to defraud the accused. The self contradictions of the complainant P.W.1, in his evidence, regarding filling up of blank cheque will prove that cheque was not issued to him for any legally enforceable debt. But, the unfilled cheque handed over to the colleague of the petitioner, filled and misused to extract money.
8. The Learned counsel appearing for the petitioner/accused submit that, there is no privity of contract between petitioner/accused and respondent/complainant. The petitioner herein had earlier transaction only with one S.Nagarajan, colleague of the respondent/complainant. The respondent had no wherewithal to advance loan of Rs.6,00,000/-.
9. The subject cheque was given to one Nagarajan in respect of property, which he was holding the power of attorney. During the course of the said transaction, the blank cheque given to Nagarajan has been misused his friend A.R.Sundar/the complainant. The blank cheque given to Nagarajan filled up and presented for Rs.6,00,000/-. The complainant has failed to prove how Rs.6,00,000/- was given to the petitioner herein. Hence, the Courts below ought to have dismissed the complaint.
10. The Learned Counsel for the petitioner/accused contended that the
The main legal point established is that the Appellate Court cannot enhance the sentence by ordering compensation in the absence of an appeal by the complainant.
The main legal point established in the judgment is that in cases of conviction under Section 138 of the Negotiable Instruments Act, unless there are special circumstances, fine up to twice the chequ....
The main legal point established is that the drawer of a cheque cannot take advantage of their own fault and must comply with the legal requirements under Section 138 of the Negotiable Instruments Ac....
Admission of cheque signature raises presumption under NI Act ss.118(a),139 of debt discharge; accused must rebut with evidence, not mere denial. Revisional jurisdiction bars reappreciation absent pe....
It has been settled in law that accused can either adduce independent evidence or rely on evidence tendered by complainant to rebut presumptions.
(1) Reasons – Reasons are obvious inasmuch as if a cheque gets dishonored, the payee will suffer hardship in meeting his financial commitments. (2) Object and Reasons – The prime object of enacting t....
The compensatory nature of proceedings under Section 138 of NI Act and the court's authority to modify the sentence and compensation amount based on relevant legal provisions.
(1) Reasons – Reasons are obvious inasmuch as if a cheque gets dishonored, the payee will suffer hardship in meeting his financial commitments. (2) Object and Reasons – The prime object of enacting t....
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