K. Soundararaj vs K. Dhanalakshmi

P.R. Shivakumar, J.—This Criminal Appeal has been filed with the leave of the High Court u/s 378(4) Cr.P.C. against the judgment of

acquittal pronounced by the learned Judicial Magistrate No. V, Coimbatore in C.C. No. 147 of 1999 dated 03.12.2001, a case instituted on

private complaint for the offence punishable u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred as the Act) by the appellant herein

against the respondent herein.

The case of the appellant/complainant, in brief, is as follows:

The respondent/accused and her husband, totally borrowed a sum of Rs. 15,00,000/- from the various members of the family of the

appellant/complainant. The respondent/accused borrowed a sum of Rs. 2,00,000/- on 17.07.1998 and another sum of Rs. 2,00,000/- on

17.08.1998 from the appellant/complainant and executed two promissory notes on the respective dates of borrowal promising to repay the same

with the interest at the rate of 24% per annum. For the said amount, the respondent/accused paid interest at the agreed rate till the end of August

1998. Thereafter, she did not make payment either towards interest or towards repayment of the principal. After repeated demands made by the

appellant/complainant, she issued a cheque bearing No. 177855 drawn on City Union Bank, Pappanaickenpalayam, Coimbatore with the

instruction to present the same for encashment on 20.01.1999. However, a day before the said date i.e. on 19.01.1999, the respondent/accused

requested the appellant/complainant not to present the said cheque on 20.01.1999 assuring that the entire amount borrowed, namely Rs.

4,00,000/- along with the interest would be settled by 25.02.1999. With such a representation she also issued another cheque bearing No.

177858 drawn on the same bank for a sum of Rs. 2,48,000/-. She had issued specific instructions to the appellant/complainant to present the said

cheques for collection on 25.02.1999, when the said cheques were presented for collection through the bankers of the appellant/complainant,

namely M/s. Andhra Bank, Mill Road/N.H. Road, Coimbatore on 04.03.1999, both the cheques were returned on the very same day with

endorsements ""Funds Insufficient"". A lawyer''s notice dated 16.03.1999 was issued to the respondent/accused demanding payment of the amount

covered by the dishonoured cheques. The said notice was received on 23.03.1999. The respondent/accused failed to make payment, but

preferred to send a reply on 30.03.1999 containing false and vexatious allegations. Therefore, the appellant/complainant was constrained to prefer

the complaint u/s 200 Cr.P.C. for prosecuting and punishing the respondent/accused for the offence punishable u/s 138 of the Act and another

offence punishable u/s 420 IPC.

The learned Judicial Magistrate No. V, Coimbatore, recorded the sworn statement of the appellant/complainant and took the case on file as

C.C. No. 147 of 1999 for the offence punishable u/s 138 of the Act alone. On appearance of the respondent/accused, she was questioned relating

to the allegations made in the complaint constituting the offence punishable u/s 138 of the Act. She pleaded not guilty. In the trial that followed such

a plea of the respondent/accused, two witnesses were examined as PW1 and PW2 and eight documents were marked as Ex. P1 to Ex.P8 on the

side of the appellant/complainant.

After the completion of the evidence for the prosecution (complainant), the accused was questioned u/s 313 Cr.P.C. regarding the incriminating

parts of the evidence adduced on the side of the appellant/complainant. The respondent/accused denied the same as false and once again

reiterated that she was not guilty of the offence with which she stood charged. It was the further statement of the respondent/accused that she did

not receive any amount from the appellant/complainant as loan; that the cheques were not issued for the discharge of any debt or other liability she

owed towards the appellant/complainant and that two of the blank cheques issued as collateral security for the loan advanced by K. Balakumaran,

the brother of the appellant/complainant were used by the appellant/complainant. The respondent/accused also contended that the two promissory

notes referred to in the complaint were blank promissory notes obtained by the said Mr. Balakumaran and that the blank promissory notes and the

blank cheques, issued as collateral security for the said loan obtained from Balakumaran, had been filled up in the name of the

appellant/complainant. The husband of the appellant has been examined as the sole defence witnesses (DW1) and five documents were marked as

Ex.D1 to Ex. D.P5 on the side of the respondent/accused.

The learned Judicial Magistrate No. V, Coimbatore, after considering the evidence available on record in the light of the arguments advanced on

either side, came to the conclusion that the respondent/accused had adduced sufficient evidence to rebut the presumptions drawn under Sections

118 and 139 of the Act and that the evidence adduced on the side of the appellant/complainant was not enough to prove that the cheques were

issued in discharge of a legally recoverable debt or other liability to attract the penal provisions u/s 138 of the Act. Based on the said finding, the

learned Judicial Magistrate held that the accused was not proved to be guilty of the offence with which she stood charged and accordingly

acquitted her by a judgment dated 03.12.2001. The correctness of the said judgment of acquittal is put in issue in this criminal appeal.

Advancing the arguments on behalf of the appellant, Mr. E.J. Ayyappan, submitted that the learned Judicial Magistrate committed an error in

holding that the cheques were not proved to be dishonoured either because the amount of money standing to the credit of that account was

insufficient to honour the cheques or because the cheque amount exceeded the amount arranged to be paid from that account by an agreement

made between the bank and the respondent/accused; that the interested testimony of DW1 would not be sufficient to rebut the presumptions under

Sections 118 and 139 of the Act; that learned Judicial Magistrate also committed an error in holding that the evidence adduced by the

appellant/complainant was not enough to prove that the cheques were issued for the discharge of a debt or other liability and that viewed from any

angle, the conclusion arrived at by the learned Judicial Magistrate holding the respondent/accused not guilty of the offence u/s 138 of the Act

should be held infirm and discrepant, capable of being corrected and reversed by this Court in exercise of its appellate jurisdiction. The learned

Counsel for the appellant also submitted that the learned Judicial Magistrate was carried away by the fact that the respondent/accused had not only

given a reply to the statutory notice issued by the appellant/complainant refuting the contents of the said notice, but also chose to issue a notice to

Bala Kumaran, the brother of the appellant/complainant.

On the other hand, the learned Counsel for the respondent/accused contended that the well considered judgment of the learned Judicial

Magistrate did not warrant any interference in this appeal; that the degree of proof necessary to rebut the presumption under Sections 118 and 139

of the Act could not be compared with the degree of proof needed on the part of the prosecuting party; that if a prima facie case was established

by preponderance of probability that itself would be enough to rebut such a presumption; that the learned Judicial Magistrate properly appreciated

the evidence adduced in the case and came to a correct conclusion by applying the correct principles of law that the charge u/s 138 was not

proved beyond reasonable doubt and that in an appeal against acquittal unless the finding of the trial Court was perverse, the judgment of acquittal

should not be reversed.

This Court gave its anxious considerations to the submissions made by the learned Counsel for the petitioner as well as the learned Counsel for

the respondent/accused. The materials available on record were also perused.

The unsuccessful complainant before the learned Judicial Magistrate is the appellant in this criminal appeal. According to the complainant''s case,

the respondent/accused borrowed a total sum of Rs. 4,00,000/- on 17.07.1998 and 17.08.1998 (Rs. 2,00,000/- on each date) and executed two

promissory notes agreeing to repay the same with 24% interest per annum. The further case of the appellant/complainant is that the

respondent/accused paid interest for the said amount till the end of August 1998 and that the principal and interest from the month of September

1998 were due. The learned Judicial Magistrate seems to have made a rowing enquiry regarding the form in which the certificate was made in the

copies of the account books to make them admissible in accordance with the provisions of the Bankers'' Book Evidence Act. By making a

reference to the provisions of the said Act, the learned Judicial Magistrate has come to the conclusion that the copy of the account book produced

and marked as Ex. P7 was not admissible as a piece of evidence. Of course, the said document was not certified by the officer in accordance with

the format prescribed in the said Act. But such a rowing enquiry was quiet unwarranted in this case for the simple reasons that the dishonoured

cheques marked as Ex. P1 and Ex. P2 contain the official mark denoting that the cheques had been dishonoured and that the banker''s slips to the

effect that the cheques were dishonoured for insufficiency of funds have been produced and marked as Ex. P3 and Ex. P4. As per Section 146 of

the Negotiable Instruments Act, the banker''s slip shall be prima facie evidence of the fact that the cheques were dishonoured for the reasons

stated therein.

In this case, the appellant/complainant need not have either examined the officer of the bank or produced an account copy to show that the

funds available in the account of the respondent/accused were insufficient to honour the cheques in question. On the other hand, the banker''s slips

marked as Ex. P3 and Ex. P4 would be the prima facie evidence to show that the funds were insufficient to honour the cheques and that the

cheques were dishonoured for the said reason. Even if Ex. B7 - copy of the account is removed from the purview of consideration, the evidence of

PW2 and Ex. P1 to Ex. P4 would be enough to draw a presumption that the cheques were returned since ""funds were insufficient"" and the amount

covered by the cheques exceeded the arrangement if any, made with the banker. Under such circumstances, it shall be the duty of the

respondent/accused to adduce evidence to rebut such a presumption. In this case there is no evidence to show that there was sufficient amount

standing to the credit of the account maintained by the respondent/accused with the concerned bank. Without there being any evidence to rebut

such presumption, the learned Judicial Magistrate seems to have arrived at a conclusion that the appellant/complainant failed to prove that the

cheques were dishonoured for the want of sufficient funds in the account on which the cheques were drawn. The said finding, as rightly contended

by the learned Counsel for the appellant, is erroneous and hence the same deserves to be reversed by this Court in this appeal.

The mere fact that the cheques were dishonoured for want of sufficient funds is not enough to come to the conclusion that the offence

punishable u/s 138 of the Act has been established beyond reasonable doubt. The further requirement is that the cheques should have been issued

to discharge a debt or other liability referred to in Section 138 of the Act. Such a debt or liability shall be a legally recoverable or enforceable one.

The initial burden in this regard shall be on the appellant/complainant. In this regard, Sections 139 and 118 of the Act are relevant. As per Section

118 there shall be a presumption, unless the contrary is proved, that the cheque was drawn for consideration. As per Section 139 there shall be a

presumption, unless the contrary is proved, that the holder of the cheque received it for the discharge, in whole or part, of any debt or other

liability. The learned Judicial Magistrate, has rightly observed in his judgment that the Court can presume that the cheques were given to discharge

a debt or liability and that the cheques were drawn for consideration. After, meticulously weighing the evidence, the learned Judicial Magistrate has

also come to a conclusion that the said presumption stood rebutted by the evidence adduced on the side of the respondent/accused. Various

points touching the said aspect have been elaborately dealt with by the learned Judicial Magistrate. According to the contents of the complaint, a

sum of Rs. 2,00,000/- was borrowed by the respondent/accused on 17.07.1998 and a further sum of Rs. 2,00,000/- was borrowed on

17.08.1998. Of course, the returned cheques produced and marked as Ex. P1 and Ex. P2 bear the respective dates. But it is curious to note that

the complainant, while deposing as PW1, has given the dates of the alleged borrowals as 17.07.1998 and 18.08.1998. The promissory notes

allegedly executed by the respondent/accused on the above said dates have been marked as Ex. D1 and Ex. D2. The respondent/accused had

taken a specific stand that blank cheques and blank promissory notes were obtained by Balakumaran, the brother of the appellant/complainant and

that the said cheques and promissory notes were filled up in the name of the appellant/complainant and thus the case was foisted against the

respondent/accused.

The appellant/complainant did not choose to produce the said promissory notes at the first instance. Only after a notice was issued to the

appellant/complainant, the same were produced in the trial Court. Though the said promissory notes were claimed to the documents obtained from

the respondent/accused to evidence the loan transaction he had had with the appellant/complainant, the appellant/complainant was not prepared to

mark those documents on his side. On the other hand, the same have been marked on the side of the respondent/accused as Ex. D1 and Ex. D2.

The features of Ex. P1 to Ex. P4 are enough to probablise the case of the respondent/accused that those cheques and promissory notes were

created with the use of blank cheques and blank promissory notes obtained by BalaKumaran, the brother of the appellant/complainant as collateral

securities for the amount borrowed from him by DW1. It is quite obvious that soon after the statutory notice demanding payment of the amount

covered by the cheques was received by the respondent/accused, proper reply was sent under Ex. P8 setting forth the above facts raised in the

defence. In addition to that the following facts were also noticed by the learned Judicial Magistrate to come to the conclusion that the

respondent/accused had adduced enough evidence to rebut the presumption drawn u/s 139 of the Act. In addition to the reply notice sent under

Ex. P8, a notice was also sent to Balakumaran, the brother of the appellant/complainant, a copy of which has been marked as Ex. D5. Similarly

the notice sent to DW1, the husband of the respondent/accused, by Devarani, wife of the appellant/complainant has also been produced and

marked as Ex. DW4.

The learned Judicial Magistrate has also noticed the fact that similar allegations were made that in a connected case against the very same

accused to the effect that a sum of Rs. 2,00,000/- was obtained as loan from the appellant/complainant on each one of the dates 17.05.1998 and

17.06.1998 and that the accused on each occasion issued cheques promising to repay the said amounts within 15 days. If at all the

respondent/accused had decided to pay back the loan within 15 days from the date of the said loans namely 17.05.1998 and 17.06.1998, she

would not have had any necessity to borrow similar amount on 17.07.1998 and 17.08.1998, the learned Judicial Magistrate has rightly observed.

The learned Judicial Magistrate has also commented upon the fact that the amounts were said to be lent on 17th of every month from 17.05.1998

to 17.08.1998. When the promise made on earlier occasion to pay back the loan within 15 days was not fulfilled, how the appellant/complainant

would have chosen to lend a further sum of Rs. 4,00,000/- on the succeeding months seems to be illogical, the learned Judicial Magistrate has

observed. The cheques and the promissory notes are found to be written by using two pens. In Ex. P1 the amount in figures and letters and the

signature of the respondent/accused are found to be written with one pen and the date and name of the payee are found to be written using another

pen. Similar features are found in Ex. P2 cheque also. In addition to that in Ex.P2 cheque there is an interpolation and insertion of the word ""eight

in between fourty and thousand. There is no explanation for the same. The initial intention of the appellant/complainant should have been to fill up

the said cheque in the month of January 1999 itself and that is why initially a sum of Rs. 2,40,000/- was written as the amount in letters and the

amount was changed in line with the subsequent change of mind to prepare the cheque as if it was issued in February 1999.

Promissory notes marked as Ex. D1 and Ex. D2 also exhibit similar features. The body of the promissory note was written with one pen and

the date, name and address of the appellant, signature and address of the witnesses and scribe were written using another pen. The explanation

offered by the appellant/complainant for the same are not convincing. Under such circumstances alone the learned Judicial Magistrate came to a

conclusion that the evidence adduced by the respondent/accused was enough to rebut the presumption drawn under Sections 118 and 139 of the

Act and that since the respondent/accused had successfully rebutted the presumption the burden would again be shifted on the

appellant/complainant to prove that the cheques were issued for the discharge of a legally recoverable debt or other liability. The learned Judicial

Magistrate came to the correct conclusion that the respondent/accused had adduced a prima facie evidence to prove his defence case that the

cheques were issued as collateral security for the amount due to Balakumaran, the brother of the appellant/complainant; that the

respondent/accused was able to prove such a defence version on preponderance of probability and that the same was enough to rebut the

presumption drawn u/s 139 of the Act. Except the interested testimony of PW1, the complainant himself, no other independent witness was

examined on the side of the appellant/complainant. The appellant/complainant had also not produced any evidence to show that the family of the

appellants did have such huge amounts to be lent to the respondent/accused as well as her husband. The learned Judicial Magistrate has marshalled

the evidence in a proper manner and came to a correct conclusion that the appellant/complainant had not proved that the cheques were issued to

him for the discharge of a legally recoverable debt or other liability and that the charge u/s 138 of the Act was not proved beyond reasonable

doubt. The said finding of the trial court is not either infirm or discrepant. There is no scope for any interference with the said finding. There is no

merit in the appeal and the same deserves to be dismissed.

For all the reasons stated above the appeal fails and hence the same is dismissed.