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2025 Supreme(Online)(Mad) 49409
IN THE HIGH COURT OF JUDICATURE AT MADRAS
G.K. ILANTHIRAIYAN, J
Mohammed Noorulla – Appellant
Versus
Narayanasamy – Respondent
Crl.R.C.No.614 of 2025
For the Appellants/Petitioners: Mr.G.Balamanikandan
For the Respondents: Mr.T.Sezhian
Convictions under Section 138 must be supported by solid evidence of legally enforceable debt; mechanical convictions are impermissible.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Criminal Revision Case - Conviction under Section 138 was confirmed by the appellate court despite the petitioner arguing that the cheque was issued for security for a loan which had been repaid and could not constitute a legally enforceable debt. The petitioner's defense was supported by evidence of bank merger that invalidated the cheque. (Paras 3, 8, 9)
(B) Burden of Proof - The initial burden of proving the debt shifted to the respondent who failed to show that the cheque was issued for a legally enforceable debt. (Para 4)
(C) Judicial Process - Court emphasized that convictions must be grounded on solid evidence, not merely on presumption. Court observed that the lower courts had acted mechanically in conviction. (Paras 5, 9)
Facts of the case:
The respondent's complaint alleged that the petitioner borrowed Rs.15 Lakhs, issuing a cheque which was returned for insufficient funds. The trial court found the petitioner guilty under Section 138.
Findings of Court:
The appellate court confirmed the conviction but failed to consider flaws in the prosecution’s case regarding the cheque’s validity due to the bank merger.
Issues: The main issues included whether the cheque was issued for a legally enforceable debt and whether the trial and appellate courts acted justly in their decisions.
Ratio Decidendi: The court determined that issuance of the cheque failed to demonstrate a legally enforceable debt and emphasized the need for thorough scrutiny of lower court convictions.
Result: Revision allowed, and prior convictions set aside.
Key Points: - Criminal Revision Case filed to set aside conviction under Section 138 NI Act confirmed by appellate court (!) (!) (!) [1] - Petitioner argued cheque issued as security for loan repaid to respondent's father, later misused, and invalidated by bank merger (!) [3][6][8] - Respondent claimed petitioner admitted issuing cheque from loan account declared NPA, discharging initial burden under Section 138 (!) - Court found cheque from Lakshmi Vilas Bank (merged with DBS Bank in 2020) invalid for 2022 loan; petitioner had DBS account declared NPA (!) (!) - Respondent failed to prove Rs.15 Lakhs lent as single cash transaction; account withdrawals mismatched complaint (!) (!) - Cheque filled by respondent, issued by petitioner's proprietary concern; respondent unaware of proprietor or relationship (!) - Petitioner rebutted presumption under Sections 118/139 NI Act; prior IPC complaint against defense witness noted (!) - Lower courts mechanically convicted without scrutinizing evidence; convictions require solid proof of enforceable debt (!) [9] - Revision allowed; convictions set aside, trial court directed to refund deposit (!) (!)
What is required to support a conviction under Section 138 of the Negotiable Instruments Act?
| Table of Content |
|---|
| 1. complaint of dishonored cheque due to insufficient funds. (Para 2 , 3) |
| 2. defense argues cheque misused post loan repayment. (Para 4) |
| 3. court examines evidence of cheque and loan validity. (Para 5 , 6) |
| 4. court finds evidence inadequate for conviction. (Para 7 , 8) |
| 5. convictions set aside due to lack of enforceable debt evidence. (Para 9) |
THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN Crl.R.C.No.614 of 2025 &
Crl.M.P.Nos.10048 and 10049 of 2025 Mohammed Noorulla ... Petitioner Vs Narayanasamy ... Respondent PRAYER: Criminal Revision Case is filed under Sections 438 /w 442 of BNSS, 2023 to set aside the impugned order of conviction and sentence passed by the learned Principal District and Sessions Judge, Kallakurichi in Crl.A.No.59 of 2024 dated 26.11.2024 confirming the order of conviction and sentence passed by the learned Judicial Magistrate, Sankarapuram in STC No.191 of 2022 dated 08.05.2024.
For Petitioner : Mr.G.Balamanikandan For Respondent : Mr.T.Sezhian
O R D E R
This Revision has been preferred to set aside the impugned order of conviction and sentence passed by the learned Principal District and Sessions Judge, Kallakurichi in Crl.A.No.59 of 2024 dated 26.11.2024 confirming the order of conviction and sentence passed by the learned Judicial Magistrate, Sankarapuram in S.T.C. No.191 of 2022 dated 08.05.2024.
2. The petitioner is the accused in the complaint lodged by the respondent for the offence punishable under Section 138 of Negotiable Instruments Act . The complaint was lodged by the respondent alleging that the petitioner is running a cement dealership business of Zuari Cement and he had acquaintance with the respondent, while being so, the petitioner borrowed a sum of Rs.15 Lakhs from the respondent on 24.12.2021 and in order to repay the said amount, he had issued cheque on 24.1.2022 and the same was presented for collection. However, it was returned dishonoured for the reason funds insufficient and after causing statutory notice, the respondent lodged a complaint and it was taken cognizance by the trial court. In order to prove the complaint, the respondent examined P.W.1 and P.W.2 and marked exhibits Exs.P.1 to P.6 and on the side of the petitioner, R.W.1 and R.W.2 were examined and no documents were marked. On the perusal of the oral and documentary evidence, the trial court found the petitioner guilty for the offence under of and sentenced to undergo 8 months simple imprisonment and ordered to pay the cheque amount of Rs.15,00,000/-, as compensation. Aggrieved by the same, the petitioner preferred an appeal and the same was also dismissed by confirming the order of conviction and sentence imposed by the trial court. As against the same, the petitioner has come up with the present revision.
3. The learned counsel for the petitioner would submit that in order to disprove the case of the respondent, the petitioner had examined D.Ws. 1 and 2 and he categorically rebutted the presumption and even then, the trial court mechanically convicted the petitioner. The petitioner used to borrow small amount from the respondent's father, therefore, the petitioner, who is the friend of R.W.2 handed over the cheque to the respondent's father for security purpose. Even after repaying the entire loan amount, the cheque was not returned to R.W.2 and it was misused in the name of the respondent and initiated proceedings under Section 138 of Negotiable Instruments Act . Except the said cheque, no other documents were received as security for such huge amount of Rs.15 Lakhs. The petitioner had absolutely no need to borrow such a huge amount, even then, the respondent failed to prove that the cheque was issued for any legally enforceable debt. That apart, the cheque was issued in the year 2013 and the alleged loan was borrowed in the year 2021 and the petitioner's cheque belong to Lakshmi vilas Bank. In the year 2020, the said bank was merged with DBS Bank. The said cheque, which belongs to Lakshmi Vilas Bank wa
