S. Krishnamurthy vs A.R. Rajan

Karpagavinayagam, J.—This revision has been preferred by the petitioner/accused, Krishnamurthy, against the judgment dated March 30,

1992, C.A. No. 36 of 1991 on the file of the learned Second Additional Sessions Judge, Salem, confirming the conviction and sentence imposed

upon him by the learned Judicial Magistrate No. 1, Salem, by his judgment dated February 22, 1991, in C.C. No. 288 of 1989 for the offence u/s

138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ""the Act"").

The respondent, A. R. Rajan, is the managing partner of Mallur Jayalakshmi Finance. He filed a complaint against the petitioner/accused for the

offences u/s 420 of the Indian Penal Code, 1860, and section 138 of the Negotiable Instruments Act, 1881, before the learned judicial Magistrate

No. 1, Salem, who in turn acquitted the accused of the charge u/s 420 of the Indian Penal Code, 1860, but convicted him for the offences u/s 138

of the Act and sentenced him to undergo rigorous imprisonment for six months and to pay a fine of Rs. 5,000 in default to undergo rigorous

imprisonment for two months. Aggrieved over this judgment, the petitioner/accused filed an appeal in C.A. No. 36 of 1991, on the file of the IInd

Addl. Sessions Judge, Salem. The learned Sessions Judge confirmed the conviction and sentence imposed upon the accused and while dismissing

the appeal observed that as the accused is entitled to the benefit of remission as per G.O.Ms. No. 279, dated February 23, 1992, he need not

undergo the said imprisonment of six months. Without satisfying the judgment of the first appellate court, the present revision has been filed by the

petitioner in this court.

The facts of the case are as follows :

The complainant, A. R. Rajan, is the managing partner of Mallur Jayalakshmi Finance. The accused/petitioner used to get loans along with his

father from the said finance company. The loans obtained by the accused/petitioner, of Rs. 62,000 dated March 20, 1985, Rs. 10,500 dated April

8, 1985, Rs. 9,000 dated May 5, 1986, Rs. 10,500 dated July 16, 1986, Rs. 30,000 dated March 29, 1988, and Rs. 20,000 dated December 2,

1987, totalling about Rs. 1,42,000 have not been settled by him. Part interest due on the above principal has also not been paid by the accused.

When the complainant insisted the accused for settlement of the above loans, the petitioner assured that he would discharge the entire amount by

one stroke on or before April 15, 1989, after disposing of his landed properties. On April 22, 1989, both the parties arrived at a settlement for the

total principal due to the tune of Rs. 1,22,000 and the loan of Rs. 20,000 dated December 2, 1987, was given up. For the said amount interest

was calculated at 18 per cent. per annum which comes to about Rs. 44,360 and the total comes to Rs. 1,66,360. On the same day, the accused

assured that he would pay the said amount by way of cheque the next day, since he has already sold his landed properties. The next day, i.e., on

April 23, 1989, the accused came and presented a cheque drawn on the State Bank of India, for Rs. 1,66,360, to the complainant, stating that

already the said amount was deposited in the bank and if the cheque is presented, it would be honoured immediately. He requested the

complainant to hand over the pronotes executed by him on different dates, in respect of the various loans referred to above. Believing the

statement of the accused to be true, the complainant returned the pronotes dated March 20, 1985, April 8, 1985, May 5, 1986, July 16, 1986,

and March 29, 1988. When the cheque was presented on the next day, i.e., on April 24, 1989, for encashment, to the shock and surprise of the

complainant, the same was dishonoured, as ""refer to drawer"" for want of sufficient funds. Thereafter, the complainant sent a legal notice dated May

8, 1989, to the accused demanding payment of the amount mentioned in the dishonoured cheque, within fifteen days from the date of notice. The

accused/petitioner sent a reply stating that he never obtained any loan whatever from the complainant and that he never issued any cheque as his

cheque book as well as pass book were lost and that the complainant has misused the same against the petitioner. On receipt of such a reply, the

complainant/respondent filed a complaint against the petitioner/accused for the offences u/s 420 of the Indian Penal Code, 1860, and section 138

of the Act.

After conclusion of the trial, the learned trial Magistrate dealt with the petitioner/accused as stated earlier, which was confirmed in appeal by the

lower appellate court. Hence, the revision.

Mr. R. M. Krishna Raju, learned counsel appearing for the petitioner, challenging the judgments of both the courts below, would press into

service the following three submissions :

(i) The complainant/respondent is not a ""payee"" or ""holder in due course of the cheque"", in view of the fact that exhibit P-21 cheque was issued in

the name of the company, and not in the name of any individual person and as such, he is not the competent person or entitled to maintain the

complaint. The complainant''s name is shown as ""A. R. Rajan"" and the complaint has not been given by Mallur Jayalakshmi Finance, which alone is

the payee. u/s 142 of the Act, no court shall take cognizance of any offence punishable u/s 138 of the Act, except upon a complaint, in writing,

made by the payee or, as the case may be, the holder in due course of the cheque. In the instant case, the complaint from a private person, who is

not the payee was entertained by the courts below, which is quite illegal.

(ii) The cheque in question, exhibit P-21, dated April 23, 1989, alleged to have been issued in respect of the debts including under the promissory

notes dated March 20, 1985 (exhibit P-15), dated April 8, 1985 (exhibit P-16), is not in respect of legally enforceable debts or liabilities, within

the meaning of section 138 of the Act, since the debts under exhibits P-15 and P-16 pronotes are barred by limitation, on the date of issuance of

the cheque dated April 23, 1989.

(iii) The prosecution failed to prove that the cheque was issued by the petitioner, particularly when the accused/petitioner denied and disputed the

execution of the said promissory notes and the cheque, exhibit P-21. In fact, no witness speaks about the execution of the cheque by the

petitioner. On these three points, learned counsel for the petitioner elaborately argued by pointing out the relevant portions of the judgments of both

the courts below and the oral and documentary evidence available on record.

Mr. V. K. Nachimuthu, learned counsel for the respondent, countered the above submissions by stating that the prosecution has produced

evidence to show that the complaint was filed by the competent person, the respondent herein who filed the same on behalf of the Mallur

Jayalakshmi Finance, under valid authorisation, and that factually no debts became time barred and that the execution of the cheque by the

petitioner/accused has been clearly spelt out through the evidence of PWs-1 to 3, and as such the finding arrived at by the courts below with

reference to section 138 of the Act is correct and unassailable.

Let me discuss the above three points raised by learned counsel for the petitioner one after another. The pre-requisite criteria u/s 142 of the Act

is that the complaint could be made only by the payee or the holder in due course of the cheque. However, nevertheless it has become relevant for

me to quote section 142 of the Act :

Cognizance of offences. - (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), -

(a) no court shall take cognizance of any offence punishable u/s 138 except upon a complaint, in writing, made by the payee or, as the case may

be, the holder in due course of the cheque;

(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138;

(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class shall try any offence punishable u/s 138.

Payee"" has been defined in section 7 of the Act, as follows :

The person named in the instrument, to whom, or to whose order the money is by the instrument directed to be paid, is called the ''payee''.

Section 9 of the Act provides for the definition of ""holder in due course"" as hereunder :

Holder in due course"" means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable

to bearer,

or the payee or indorsee thereof, if payable to order, before the amount mentioned in it became payable, and without having sufficient cause to

believe that any defect existed in the title of the person from whom he derived his title.

The conjoint reading of sections 7, 9 and 142 of the Act, would clearly establish that the complaint cannot be entertained by the court of law,

unless it is filed by the competent person. The contention raised by learned counsel for the petitioner is that the complaint in this case was filed by

an individual, viz, A. R. Rajan, while the cheque was issued in the name of Mallur Jayalakshmi Finance, and as such the complaint has to be thrown

out, due to the incompetency of the person who filed the same.

Though this argument looks attractive at the first blush, a deep probe with reference to the oral and documentary evidence available in this case

would expose that the same cannot be said to be correct. Even in the complaint, it is stated as ""A. R. Rajan, managing partner, Mallur Jayalakshmi

Finance"", which shows that the complaint has been filed by A. R. Rajan, in the capacity of the managing partner of the said finance. Exhibit P-2 is

the partnership deed of the said Mallur Jayalakshmi Finance, in which the managing partner is authorised to initiate proceedings on behalf of the

finance in the court of law. Even in the course of cross-examination, there was no suggestion put to PW-1, A. R. Rajan, to the effect that he was

not the payee or the holder in due course. The learned lower appellate judge correctly considered this aspect and rejected such contention. In the

light of the above discussion, the first submission fails, as it has no merit.

Regarding the second submission, viz., that the cheque amount includes the debts under time-barred pronotes, both the courts below have

elaborately considered and gave a clear finding. The first appellate court has rightly held that exhibit P-21, cheque has been issued by the accused

to the complainant only to discharge his debts. Besides the concurrent finding of the courts below, the perusal of the evidence of PW-1 exhibits P-

8 to P-10 would as well make it clear, that in respect of the alleged two time barred pronotes, the accused has paid interest on various dates and

thereby the two disputed pronotes have not become time barred. So, on the basis of the material documents, I am of the view, that the prosecution

has established that the cheque, exhibit P-21, has been issued by the accused in discharge of the legally enforceable debts.

The third contention is that in spite of the denial on the part of the accused regarding the very execution of the cheque, exhibit P-21, the

prosecution has failed to prove such execution. Learned counsel for the petitioner asserts that no witness examined on the side of prosecution

speaks about the execution of the cheque by the accused. Learned counsel for the respondent brought to may notice relating to this aspect by

taking through the entire evidence of PWs-1 to 3. PW-1 has deposed that the accused on April 23, 1989, came to Mallur Jayalakshmi Finance

and gave exhibit P-21 cheque for Rs. 1,66,360. This aspect of evidence of PW-1 has been spelt out by PWs-2 and 3. The first appellate court,

while dismissing such plea raised on behalf of the accused, has rightly observed that though the figures in exhibit P-21 have not been written by the

accused, the cheque was signed by the accused alone, and that the evidence of PWs-1 to 3 who speak about the same could be relied upon.

When there is a challenge against exhibit P-21 cheque, the accused/petitioner would have, as well, sent the cheque to a handwriting expert for

opinion, which has not been done in this case. The initial burden to prove the issuance of the cheque by the accused has been satisfactorily

discharged by the prosecution through PWs-1 to 3. In that view of the matter, both the courts below have correctly come to the conclusion, that

the offence u/s 138 of the Act has been committed by the petitioner.

In the fact situation, I do not find any illegality in the findings arrived at by the courts below, and also I do not propose to take a different view

from that of the view taken by the courts below. As the revision has no merit, the same is liable to be dismissed. Accordingly, the revision is

dismissed.