The court confirmed the presumption of liability under Section 138 of the Negotiable Instruments Act, emphasizing the importance of establishing a legally enforceable debt in cheque dishonor cases.

ORDER :

SUNDER MOHAN, J.

The Criminal Revision Case is filed by the petitioners/A1 & A2 challenging the judgment dated 04.08.2023 in Crl.A.199 of 2021 on the file of the VI Additional City Civil Court, Chennai, thereby confirming the judgment dated 04.12.2021 in CC.No.5702 of 2016 on the file of the Metropolitan Magistrate Fast Track Court No.1, Allikulam, Egmore, Chennai, convicting the petitioners for the offence under Section 138 of the Negotiable Instruments Act and sentencing the 2^nd petitioner to undergo simple imprisonment for six months and to pay a compensation of Rs.7,70,00,000/-, in default to undergo simple imprisonment for a further period of six months.

2(i) The case of the respondent/complainant as stated in the complaint before the trial Court for the offence under Section 138 of the Negotiable Instruments Act, is that the respondent is the Company registered with the Indian Newspaper Society; that it has built a strong reputation and deals with various Government departments such as PWD, TWAD, MNCs and other Private Production and Entertainment Companies; that the 2^nd petitioner, as the Director of the 1^st petitioner company approached the respondent for monetary assistance of Rs.20 Crores for the post production of the movie 'Kochadaiiyaan' by representing that the 1^st petitioner company is an upcoming entertainment company and that the lease rights of the film 'Kochadaiiyaan' will fetch the respondent the return of Rs.20 Crores with interest and a minimum guaranteed profit of Rs.2.40 Crores.

(ii) It is the further case of the respondent that believing the words of the 2^nd petitioner, the respondent entered into a Memorandum of Understanding [MoU] dated 25.04.2014 pursuant to which the petitioners borrowed a sum of Rs.10 Crores, which was sent to them by RTGS on 28.04.2014 through Central Bank of India; that the petitioners guaranteed the due repayment before the release of the said movie i.e., on or before 07.05.2014, which was further extended to 21.05.2014; that the petitioners also represented that they would not sell the rights of the movie 'Kochadaiiyaan', to any other company without paying the amount due to the respondent; and that they promised to pay 20% of the sale commission in case the rights of the movie is sold to any third party in addition to the principal amount of Rs.10 Crores and the guaranteed profit share.

(iii) Further it is alleged in the complaint that towards part discharge of the said liability, the petitioners issued a cheque bearing No.587789 drawn on Indian Overseas Bank dated 13.12.2014 for a sum of Rs.5 Crores; that the said cheque was presented in the City Bank, Mount Road Branch for clearance; that it was returned on 16.12.2014, with a return memo for the reason, “stop payment by the drawer''; that the respondent issued a statutory notice through Registered Post on 20.12.2014 demanding the payment of Rs.5 Crores; that the petitioners received the said notice on 22.12.2014 and gave a false reply without paying the cheque amount and hence, the petitioners are liable for the offence under Section 138 of the Negotiable Instruments Act.

3. Before the trial Court, the respondent’s representative and its Director viz., Abirchand Nahar examined himself as PW1 and the Branch Managers of the respondent's bank as well as the petitioners' bank as PW2 and PW3, respectively. Six documents were marked on the side of the respondent as Ex.P1 to Ex.P6. Ex.P1 is the Board Resolution of the respondent; Ex.P2 is the MoU dated 25.04.2014 entered into between the respondent and the petitioners; Ex.P3 is the cheque involve