K. Nagarajan vs N. Prakash

Anand Byrareddy, J.—Heard the learned Counsel for the appellant, who was the complainant before the court below. He had alleged that the respondent-accused had committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (Hereinafter referred to as the ''NI Act'', for brevity).

The allegations were that the respondent was a friend of the complainant and that he had borrowed a sum of Rs. 1,50,000/- as on 10.1.2005, for the purpose of clearing a certain loan and he had assured that he would repay the amount within one month. In order to secure due repayment, he had issued a post-dated cheque bearing no. 681948, drawn on M/s. Indian Bank, Ulsoor Branch, Bangalore, dated 26.3.2005 for a sum of Rs. 1,50,000/-. However, when the respondent did not repay the amount, the cheque was presented for realisation through his banker, but, it was returned with the banker''s endorsement stating that the funds were insufficient. It is thereafter that the complainant had got issued a legal notice dated 22.8.2005, calling upon the respondent to pay the amount as required under Section 138 of the NI Act and on failure to comply with the demand, a complaint was filed. The respondent had entered appearance and the court having taken cognizance, had issued summons. The accused pleaded not guilty and claimed to be tried. Therefore, the complainant had tendered evidence and had produced document, marked Exhibits P.1. to P.5. The respondent, in turn, was examined as DW. 1 and got marked Exhibit D.1. It is on the basis of the said evidence, the court below has proceeded to examine the case, particularly as to whether there was a legal liability, in respect of which, a cheque was issued and accepting the defence of the accused to the effect that he had borrowed only Rs. 60,000/- from the complainant and he had paid a sum of Rs. 7500/- and he was due only Rs. 52,500/-. On the other hand, the complainant had argued that it was true that the complainant had given a hand loan of Rs. 60,000/- which was repayable within three months and when the accused did not repay the amount, the complainant had approached the Ulsoor Police and the Ulsoor Police had sent for the respondent and the respondent had agreed to pay the amount in instalments at Rs. 2,500/- per month and he had paid three instalments and thereafter had defaulted. Thereafter, the accused had borrowed a further sum of Rs. 97,500/- and had promised to repay a total amount of Rs. 1,50,000/-. It is in discharge of that loan, that Exhibit P. 1 was issued.

The court has proceeded to analyse these claims and counter claims and has dwelt upon the amounts, as stated by the accused and as stated by the complainant and has opined that there is inconsistency in the amounts that were borrowed or lent and the amount shown in the cheque in question and has disbelieved that there was a legal liability, in discharge of which the cheque in question had been issued. This approach of the court below has resulted in the respondent having been acquitted. But on the other hand, it is apparent that there was indeed a transaction between the complainant and the respondent and a cheque having been issued in discharge of a liability, the particulars of the amounts lent and borrowed would pale into insignificance, as long as there was admission of the transaction, as it was not a suit for recovery of money where the court was called upon to adjudicate on the exact amount that was due or payable. But the question was whether the cheque had been issued by the accused on his account and whether the same had been dishonoured on presentation. That was adequately established and therefore, the offence alleged was proved and it could not be said that on account of the inconsistency insofar as the amounts that were said to have been borrowed or lent, is concerned, the complaint would not disclose that the cheque was issued in discharge of a legal liability. This premise does not flow from the admitted circumstances.

Consequently, the judgment of the court below is set aside. The offence punishable under Section 138 of the NI Act is held proved. The respondent is convicted and sentenced to pay a fine of Rs. 1,60,000/- of which Rs. 1,50,000/- shall be paid as compensation to the complainant, the appellant herein, under Section 357 of the Code of Criminal Procedure, 1973. In default, the respondent is sentenced to undergo simple imprisonment for a period of one month.