K. Padmanathan vs M. Somasundaram

P.R. Shivakumar, J.—This appeal is directed against the judgment of acquittal pronounced by the learned Judicial Magistrate No. I, Tirupur

in C.C. No. 451 of 1999 a case taken on file based on the complaint of the petitioner herein against the respondent herein alleging that the

respondent committed an offence punishable u/s 138 of the Negotiable Instruments Act, 1881 (hereinafter referred as the Act).

The learned Judicial Magistrate after trial found the respondent herein/accused not guilty of the offence for which he was prosecuted and

acquitted him of the said offence by his judgment dated 08.02.2002.

The appellant herein had preferred the private complaint u/s 200 Cr.P.C. containing the following averments:

On 16.11.1998 the respondent/accused borrowed a sum of Rs. 5,00,000/- from the appellant/complainant at Tirupur for his urgent business

expenses and on the same date executed a promissory note in favour of the appellant/complainant promising to repay the said amount with an

interest at the rate of 24% per annum. Despite repeated demands the respondent/accused did not pay any amount either toward principal or

interest. At last on 21.07.1999 the respondent/accused issued a cheque bearing No. 145826 drawn on Lakshmi Vilas Bank limited, Tirupur

Branch for a sum of Rs. 5,00,000/-. When the said cheque was presented on 28.07.1999 through Syndicate Bank, Tirupur Branch for collection,

the same was returned with an endorsement ""account closed"". The said fact was informed to the appellant/complainant by his bankers on

29.07.1999 whereupon a statutory notice demanding payment was caused to be issued on 04.08.1999 to the residence as well as the office of the

respondent/accused. The notices sent to the residence of the respondent and the office of the respondent/accused were received on 06.08.1999

and 09.08.1999 respectively. As the respondent/accused did not comply with the demand made in the notice, the appellant/complainant was

constrained to file the private complaint for prosecuting and punishing the respondent/accused for the offence punishable u/s 138 of the Act.

The learned Judicial Magistrate, after recording the sworn statement of the appellant/complainant, registered the same as C.C. No. 451 of 1999

and issued process. On appearance of the respondent/accused he was questioned regarding the allegations made in the complaint constituting the

offence. The respondent/accused denied them to be false and pleaded not guilty. In the trial that followed such a plea, the complainant examined

himself as PW1 and one Ramesh, the Manager of Lakshmi Vilas Bank, Tirupur Branch as PW2. Ex. P1 to Ex. P9 were marked on his side. The

respondent/accused was examined u/s 313(b) of the Cr.P.C. regarding the incriminating materials appearing in the evidence adduced on the side of

the prosecution (complainant). The respondent/accused denied them to be false and it was his further contention that the promissory note and the

cheque produced on the side of the appellant/complainant and marked as Ex. P1 and Ex. P2 respectively were the blank promissory note and

blank cheque given as collateral security for the amount borrowed from one Santha Lakshmi Finance in which the appellant/complainant as well as

his brother Panchanathan were partners and that the same were filled up in the name of the appellant/complainant and the present case was filed as

a vexatious one. The other contention of the respondent was that out of Rs. 5,00,000/- borrowed from Santha Lakshmi Finance, Rs. 3,00,000/-

had been repaid on 14.11.1998 for which a receipt was issued by Panchanathan, the brother of the appellant/complainant and that the said receipt

would clearly prove Ex. P2 cheque was one of the blank cheques handed over by the respondent/accused to the said Santha Lakshmi Finance as

collateral security. Six witnesses were examined as DW1 to DW6 and four documents were marked as Ex. D1 to Ex. D4 on the side of the

respondent/accused.

The learned Judicial Magistrate after hearing the arguments advanced on both sides, evaluated the evidence and came to the conclusion that the

charge u/s 138 of the Act against the respondent/accused was not proved beyond reasonable doubt and hence pronounced a judgment acquitting

the respondent/accused in respect of the said charge. Aggrieved by the said judgment of acquittal, the appellant/complainant has come forward

with this criminal appeal with the leave of this Court obtained u/s 317(4) Cr.P.C.

On the previous hearing date, the matter was adjourned at the request of the learned Counsel for the appellant as well as the learned Counsel

for the respondent so as to give them a chance to explore the possibility of arriving at a settlement. Today, the learned Counsel for the

respondent/accused submitted that there was no chance of settlement and hence this Court heard the arguments advanced on either side and also

perused the materials available on record.

The unsuccessful complainant before the learned Judicial Magistrate is the appellant in this criminal appeal. The complaint was made for

punishing the respondent/accused for the offence punishable u/s 138 of the Act based on the contention that the respondent/accused borrowed a

sum of Rs. 5,00,000/- from the appellant/complainant on 16.11.1998 and after having failed to pay any amount towards principal or interest

choose to issue a cheque on 21.07.1999 and the said cheque when presented for collection was returned with an endorsement ""account closed"".

The defence plea raised by the respondent/accused before the lower court was that he never borrowed any amount from the appellant/complainant

and the cheque in question marked as Ex. P2 was not the one issued in favour of the appellant/complainant, much less for the discharge of any

debt due to him. On the other hand, it was the specific contention before the lower Court that the blank cheque handed over to Santha Lakshmi

Finance at the time of borrowing a sum of Rs. 5,00,000/- had been filled up and misused to prosecute the respondent/accused as if he had issued

the said cheque in discharge of the debt due to the appellant/complainant.

The learned Counsel for the appellant submitted that that the appellant had nothing to do with the Santha Lakshmi Finance and that the

transaction between the appellant and the respondent was an entirely different one. The learned Counsel for the appellant contended further that

Ex. D4 receipt allegedly issued by Panchanathan, the brother of the appellant/complainant in his capacity as partner of Santha Lakshmi Finance

would not bind the appellant/complainant as he had no connection with the said finance company. Per contra, the learned Counsel for the

respondent/accused took the Court through the evidence of PW1 who has candidly admitted that he was one of the Directors of Santha Lakshmi

Finance. In view of the said admission, the contention of the learned Counsel for the appellant/complainant that any receipt issued by Panchanathan

on behalf of the Santha Lakshmi Finance will not be binding upon the appellant becomes unsustainable and untenable. However, the learned

Counsel for the appellant submitted an alternative argument to the effect that the transaction between the respondent/accused and Santha Lakshmi

Finance and the transaction between the respondent/accused and the appellant as an individual were two different unconnected transactions and

the cheque in question was issued in respect of the transaction that the respondent had had with the appellant as an individual and not as partner or

director of Santha Lakshmi Finance. The said submission at the outset seems to be somewhat appealing. However, it becomes ineffective in the

light of the fact that the dishonoured cheque marked as Ex. P2 is found to be one of the cheques issued as blank cheque as collateral security for

the loan advanced by Santha Lakshmi Finance. This is obvious form the oral and documentary evidence adduced on the said of the

respondent/accused and more particularly the receipt issued by Panchanathan on behalf of the Santha Lakshmi Finance marked as Ex. D4.

In Ex. D4 it has been clearly stated that the respondent/accused borrowed a sum of Rs. 5,00,000/- from the said finance company out of which

a sum of Rs. 3,00,000/- was repaid on 14.11.1998 and that whenever the balance amount would be paid, 10 cheques of Lakshmi Vilas Bank

bearing numbers 145825 to 145834 would be returned along with the five blank promissory notes. Ex. A2 cheque bears the number 145826.

That itself will be enough to come to the conclusion that the cheque in question was issued as collateral security in favour of Santha Lakshmi

Finance and the same has been filled in the name of the appellant as if it was issued for the discharge of the loan advanced by him in his individual

capacity. Had the appellant come to the Court with the true facts that the amount was lent by the Finance company of which he was a partner and

that as such the cheque was issued to him as a partner of the said Finance company in discharge of the said debt, there would have been some

substance in the case of the appellant. On the other hand, since the appellant has come forward with two alternative theories: one to the effect that

there was no connection between himself and Santha Lakshmi Finance and the other to the effect that though he was a partner/director in Santha

Lakshmi Finance, the cheque was issued in entirely a different transaction between himself as an individual and the respondent/accused. Under the

above mentioned circumstances, the evidence adduced on the side of the respondent/accused is not only sufficient to rebut the presumptions under

Sections 118 and 139 of the Act, but also sufficient to prove that the cheque was not at all issued to the appellant/complainant, much less for the

discharge of any debt due to him. This Court finds no defect or infirmity either in the approach made by the learned Judicial Magistrate No. I,

Tirupur or the conclusion arrived at by him. The finding of the learned Judicial Magistrate No. I, Tirupur to the effect that the respondent/accused

was not proved beyond reasonable doubt to be guilty of the offence u/s 138 of the Negotiable Instruments Act cannot be termed either infirm or

defective. There is no ground, whatsoever, to interfere with the same. This Court finds no merit in the appeal and the same deserves to be

dismissed. Accordingly it is dismissed.