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Judgment
K.N. Basha, J.—This appeal is preferred by the appellant challenging the judgment of acquittal passed by the learned Metropolitan
Magistrate No, XVIII, Saidapet, Chennai, in C.C. No. 3436 of 1996, dated 20-3-1998, acquitting the accused for the offence u/s 138 of the
Negotiable Instruments Act.
The complainant has come forward with the allegation that it is a public limited company registered under the Indian Companies Act, 1956,
having its Principal Office at Mumbai and a Branch Office amongst other places in India including at Chennai. The complainant has stated that the
accused on 9-11-1995 came forward with a written request for discounting a Bill of exchange for a face value of Rs. 15,00,000/- for covering a
transaction with M/s. Nalanda Synthetics Limited, Hyderabad.
A complaint was filed by the complainant through P.W. 1, who has been duly authorised by a power of attorney document, Ex. P, 1, Ex. P. 2 is
the letter of request given by the accused to the complainant for discounting a bill of exchange for a value of Rs. 15,00,000/-. The bill is marked as
Ex. P.3. The delivery chalan is marked as Ex. P,4. The bill of exchange is Ex. P.5. The accused also issued a cheque dated 7-2-1996 for an
amount of Rs. 15,00,000/- drawn on Vijaya Bank, Somajinguda, Hyderabad, which is marked as Ex. P. 6. Thereafter, the complainant was about
to present the above said cheque on 7-2-2006, the accused requested to defer for some time. On 16-3-1996 a part payment of Rs. 2,00,000/-
was made by the accused. When the complainant deposited the cheque, Ex. P.5 on 3-5-1996 in their Bank the same was returned on the ground
of ""insufficient funds"". The Bank Memo is Ex. P.7 and Debit Advice is Ex. P.8. Thereafter, he has sent a registered legal notice, Ex. P. 9,
demanding the accused to settle the amount due to dishonour of cheque as contemplated u/s 138 of the Negotiable Instruments Act. Ex. P. 10 to
12 are the acknowledgments for the receipt of the legal notice, Ex. P9 received by the accused. The accused sent a reply to the complainant
stating that they will settle the amount in installments. Ex. P. 13 is that letter. But till the filing of the complainant the accused has not settled the
amount.
The complainant in order to prove his case examined P.Ws. 1 to 3 and marked Exs. P.1 to P. 14. P.W. 2 is the Manager of the Canara Bank.
Ex. P, 14 is the authorisation given to P.W. 2 to give evidence for the complainant. P.W. 3 is the Manager of Vijaya Bank, Somajinguda,
Hyderabad.
When the accused was questioned u/s 313, Cr. P.C. in respect of the incriminating materials made appearing against him through the evidence
adduced by the complainant, the accused denied his complicity to the crime and stated that he has been falsely implicated in this case.
The accused also examined D.W. 1 who was working as General Manager of the accused company and he has also implicated in this case as
A-2. It is stated by D.W. 1 that the Rs. 15,00,000./- bill discounting facility was arranged by the complainant company and Rs. 15,00,000/-
cheque was given as security. It is also stated by D.W. 1 that on 16-3-1996 Rs. 2,00,000/- was paid as part payment to the complainant
company. Ex, D, 1 is the letter sent by the complainant company. In the Advocate Notice sent by the complainant company, it is stated that an
amount of Rs, 13,00,000/- was only due.
The learned Magistrate on consideration of the entire evidence adduced by the complainant and on the perusal of the records has come to the
conclusion that the complainant has not proved his case against the accused and acquitted the accused. Aggrieved against the order of acquittal the
complainant has come forward with this appeal.
The learned trial Magistrate acquitted the accused by giving the following reasons:
(i) A sum of Rs. 2,00,000/- was paid by the accused to the complainant and dishonoured cheque, Ex. P.6, for a sum of Rs. 15,00,000/- was also
given by the accused and therefore the accused is liable to pay only Rs. 13,00,000/- and not Rs. 15,00,000/-. Therefore filing of the case for the
entire amount under Ex. P. 6 is not valid and as a result Section 138 of the Negotiable Instruments Act is not attracted.
(ii) As on 16-3-1996, the accused is liable to pay Rs. 13,00,000/- to the complainant and the complainant even without giving any notice to the
accused has deposited the cheque, Ex. P.6 for Rs. 15,00,000/- and the said act of the complainant also affects the complainant''s case.
(iii) Yet another reason given by the learned Magistrate while acquitting the accused is that the complainant has not sent the statutory notice within
the stipulated period has contemplated u/s 138 of the Act. It is observed by the learned trial Magistrate that the bank intimation, Ex. P.8 regarding
the dishonour of cheque received by the complainant on 10-5-1996 and the complainant said to have sent the registered legal notice within a
period of 15 days from the date of receipt of the written Bank Memo viz. 25-5-1996. The learned Magistrate also held in this case that the notice,
Ex. P.9, dated 23-5-1996 was sent on 24-5-1996. But the perusal of Ex. P. 10 to P. 12 show that Ex. P.9, notice was sent only on 27-5-1996
and 28-5-1996 respectively and therefore, the complainant has not sent the statutory notice within the stipulated period as contemplated u/s 138 of
the Act and therefore, the learned Magistrate held that the complaint is not maintainable which is against the provisions of Section 138 of the Act.
Mr. R. Chellamuthu, learned Counsel appearing for the appellant while assailing the order of acquittal of the learned Magistrate has put forward
the following contentions:
(a) The findings of the learned Magistrate are not based on the materials available on record and the learned Magistrate has misread the evidences
and acquitted the accused.
(b) The finding of the learned Magistrate that admittedly a sum of Rs. 2,00,000/- was paid out of Rs. 15,00,000/- by the accused and the
remaining balance is only Rs. 13,00,000/- and therefore, the accused is not liable to pay an amount of Rs. 15,00,000/- is not maintainable is on the
face of it illegal and unsustainable in law. The learned Counsel placed reliance on the decision of this Court rendered by M. Karpagavinayagam, J.
in S. Thangamani v. R.S.T. Steels etc. reported in 2001-2 LW (Crl) 536.
(c) The finding of the learned Magistrate that the presentation of the cheque, Ex. P.6, by the complainant even after the request made by the
accused to present the cheque after two weeks affects the prosecution case and the same is not based on the evidence. There is absolutely no
documents produced by the accused that he has already requested the complainant not to present the cheque for two weeks.
(d) The last reason assigned by the learned Magistrate for acquitting the accused viz., the statutory notice, Ex. P.9, was not sent within the period
of limitation contemplated u/s 138 of the Negotiable Instruments Act and the same was sent only on 27-5-1996 and 28-5-1996 is also contrary to
the facts of the materials available on record. It is evident that the notice Ex. P.9, dated 23-5-1996. was sent on 24-5-1996 and the Bank Memo
was received by the complainant on 10-5-1996 and therefore the statutory notice was sent to the accused within time stipulated under the Act.
Per contra, Mr. T. K. Sampath, learned Counsel for the respondent contended that the reasons assigned by the learned Magistrate acquitting
the accused was based on materials available on record. The learned Counsel further contended that admittedly Rs. 2,00,000/- was paid by the
accused out his dues of Rs. 15,00,000/- and therefore, the complainant filing the case on the basis of the cheque, Ex. P.6 for Rs. 15,00,000/- is
unsustainable in law. The learned Counsel also contended that the statutory notice. Ex. P9 was not sent within the time limit from the date of receipt
of the bank intimation as contemplated u/s 138 of the Negotiable Instruments Act and therefore, the entire proceedings is vitiated and the non-
compliance of such mandatory requirement is fatal to the case of the complainant.
I have given my careful consideration to the rival contentions put forward by either side.
I have perused the entire records both evidence as well as the exhibits. The entire perusal of the records shows that the accused admitted his
liability to the extent of Rs. 13,00,000/-. The only grievance of the accused is that he is liable to pay Rs. 13,00,000/- out of Rs. 15,00,000/- as he
has already paid Rs. 2,00,000/-. Therefore, the complaint filed on the basis of the return of the cheque, Ex. P.6 for an amount of Rs. 15,00,000/-
and therefore the complaint itself is not maintainable as there is no legally enforceable liability on the part of the accused to the tune of Rs.
15,00,000/-. Such defence plea of the accused is unsustainable in law. The learned Counsel for the appellant has rightly placed reliance on the
decision of this Court rendered by M. Karpagavinayagam, J. in S. Thangamani v. R.S.T. Steels, etc. reported in 2001 (2) LW (Cri) 536, this
Court has held that,
Therefore, the meaning of the word ""such amount"" would indicate not with reference to the cheque amount but with reference to the amount of
liability, namely Rs. 1,01,574/-. Therefore, the notice sent by the complainant demanding Rs. 1,01,574/- being the portion of the cheque amount,
is perfectly valid and if the said amount had not been paid within 15 days from the date of receipt of the said notice, it is natural that the cause of
action would arise and consequently, complainant would be entitled to approach the Court by filing a complaint u/s 138 of the Negotiable
Instruments Act.
In a similar situation, the Andhra Pradesh High Court in Andhar Engineering Corporation v. T.C.I. Finance Ltd. 1999 (3) Cri 504, would hold
that the portion of the amount either more than the cheque amount or less than the cheque amount would not make either the notice or the
complaint invalid, in view of the fact that non-payment of the balance amount, though it is a portion of the cheque amount, despite receipt of notice
would definitely create a cause of action u/s 138(1)(c) of the Negotiable Instruments Act.
Therefore, merely because the accused had paid an amount of Rs. 2,00,000/- will not absolve him from the legally enforceable liability in respect
of the portion of the dishonoured cheque amount. The decision cited supra, is squarely applicable to the facts of this case. In that decision this
Court held,
The words ""such amount"" as contemplated u/s 138 of the Negotiable Instruments Act would relate to the portion of the cheque amount
because even according to the complaint, though the cheque was obtained for more amount, it was issued only towards discharge of only a portion
of the cheque amount, namely, Rs. 1,01,574/-.
Therefore, the learned Magistrate has committed serious error of law in acquitting the accused on the basis of the above said reason.
Yet another important reason given by the learned Magistrate for acquitting the accused is that the accused informed the complainant that he
would settle the dues in installments as per his letter, Ex. P. 13 and the accused has sought for two weeks time for further payments. But the
complainant even without informing the accused has presented the cheque, Ex. P.6 for Rs. 15,00,000/- which affects the case of the complainant is
also contrary to the facts and materials available on record. The learned Magistrate failed to consider that the accused has miserably failed to
establish such a plea that he had made a request for further time in settling the dues. But he has not produced any documents in support of his
version. It is also relevant to note that P.W. 1 has categorically stated in his cross-examination that he has not received any written request by the
accused requesting the complainant to wait for two more weeks for presenting the cheque. Ex. P. 13 is the reply sent to the statutory notice, Ex.
P.9. In that reply, the accused has admitted his liability to the extent of Rs. 13,00,000/- as he has already paid an amount of Rs. 2,00,000/-. It is
also further mentioned in that reply notice that the complainant agreed to receive the amount in installments. It is relevant to note that there is
absolutely nothing mentioned in Ex. P13, the reply sent by the accused to the statutory notice that the accused has requested the complainant to
wait for presenting the cheque. Therefore, the finding given by the learned Magistrate for acquitting the accused on this fact also contrary to the
materials available on record and as such unsustainable in law.
The last reason given by the learned Magistrate for acquitting the accused is that the complainant has not sent the statutory notice, Ex. P.9
within the time limit prescribed u/s 138 of the Negotiable Instruments Act. The complainant has sent the notice dated 23-5-1996 on 24-5-1996. If
he has sent the notice on 24-5-1996, it would be well within the time limit. But the perusal of Exs. P. 10 to 12 - the certificates issued by the postal
department show that the statutory notice, Ex. P.9 was delivered to the addressee only on 27-5-1996 and 28-5-1996 respectively. The learned
Magistrate further observed for assigning the above said reasons that the bank intimation regarding the dishonour of cheque was sent on 10-5-
1996. Therefore, the statutory notice, Ex. P.9 must have been sent on or before 25-5-1996. But the notice, Ex. P.9, was delivered only on 27-5-
1996 and 28-5-1996 and therefore the statutory notice was not sent to the accused within the time limit prescribed under Negotiable Instruments
Act. the perusal of Exs. P. 10 to 12 clearly shows that the statutory notice, Ex. P.9 was not despatched on 24-5-1996. The perusal of Ex. P, 10,
letter sent by the postal department to the advocate of the complainant shows that Ex. P.9 statutory notice was despatched on 24-5-1996 and the
same was delivered to the addressee on 27-5-1996. The perusal of Ex. P. 11, letter written by the postal department shows that the statutory
notice was despatched on 24-5-1996 and it was delivered to the addressee on 27-5-1996. The perusal of Ex. P. 12, the letter written by the
postal department to the advocate of the complainant shows that Ex. P.9 statutory notice was despatched on 24-5-1996 and the same was
delivered to the addressee on 28-5-1996. Therefore, the perusal of the above said documents, Ex. P. 10 to 12 makes it crystal clear that the
notice, Ex. P.9 was despatched on 24-5-1996 itself i.e. well within the time limit prescribed u/s 138 of the Negotiable Instruments Act as the
complainant received the Bank Intimation on 10-5-1996 and he has sent the statutory notice within 15 days from the date of receipt of the Bank
Intimation. The finding of the learned Magistrate that the statutory notice, Ex. P.9 was not sent within the time prescribed u/s 138 of the Act is on
the fare of it contrary to the facts. The learned Magistrate has misread the documents viz., Exs. P. 10 to 12.
It is well settled that in an appeal against acquittal if the learned trial Judge overlooked any material evidence or misread any evidence and if the
findings are not based on the materials available on record then the interference in the order of acquittal is justified by this Court. Therefore, this
Court is left with no other alternative except to allow the appeal and to set aside the order of acquittal and to convict the accused.
At this juncture, the learned Counsel for the respondents/accused submitted that the Company was already declared as ""Sick"" in the year
2004. It is further submitted by the learned Counsel for the respondents/accused that there was no running business for the last more than five
years. It is also submitted by the learned Counsel for the respondents/accused that the respondents are not having enough source of income, as a
result of which, they are suffering. The learned Counsel further brought to the notice of this Court that the third respondent/third accused, died
during the pendency of this Appeal. Therefore, the learned Counsel for the respondents submits that the entire burden in respect of the liabilities of
the Company is shouldered only on the second respondent/second accused. Therefore, the learned Counsel pleaded that the above said mitigating
circumstances shall be considered by this Court, while imposing the sentence.
I have also heard the learned Counsel for the appellant/complainant in respect of these aspects.
Considering the above said mitigating circumstances and also considering the fact that the alleged transaction took place about ten years back,
I am of the considered view that ends of justice would be met by directing the second respondent/ second accused to pay an amount of Rs.
5,00,000/- (rupees five lakhs only) as compensation to the appellant/complainant, within a period of two months from the date of receipt of a copy
of this order. In default of payment of the above said compensation, the second respondent/second accused, should undergo rigorous
imprisonment for a period of six months.