V.P. Eswaramoorthy vs Murugani

A.C. Arumugaperumal Adityan, J.—This revision has been preferred against the Judgment in C.A. No. 52 of 2005 on the file of the

Additional District Judge-cum-Fast Track Court No. 1, Erode which had arisen against the Judgment in C.C. No. 613 of 2002 on the file of

Judicial Magistrate No. 1, Erode.

A private complaint was filed u/s 200 Cr.P.C. for an offence u/s 138 of Negotiable Instruments Act 1881 against the accused claiming that two

cheques drawn by the accused dated 18.7.2002 for a sum of Rs. 3,00,000/- and another cheque dated 25.7.2002 for a sum of Rs. 2,38,692/-.

When presented for collection on 20.9.2002 in the Indian Overseas Bank, Erode Branch, both cheques were returned by the bank stating that

there is no sufficient fund in the account of the drawer of the cheque to honour the same. A statutory notice was issued by the complainant on

27.9.2002 calling upon the accused to pay the said cheque amount, amounting to a sum of Rs. 5,38,692/- giving 15 days time for payment. The

said notice was returned with an endorsement ""not claimed"" on 19.10.2002. The accused had failed to make any payment subsequently. Hence

the complaint.

After recording the sworn statement of the complainant, the learned Judicial Magistrate No. 1, Erode taking the complaint on file as C.C. No.

613 of 2002 and on appearance of the accused on summons, copies u/s 207 Cr.P.C. were furnished to the accused and when the offence was

explained to the accused and questioned the accused pleaded not guilty.

On the side of the complainant P.W. 1 was examined. Exs. P1 to P8 were exhibited.

P.W. 1 is the complainant, who would depose what he had narrated in the complaint. Exs. P1 and P2 are the impugned cheques dated

18.7.2002 and 25.7.2002 respectively. Ex. P3 is the returned memo dated 21.9.2002 sent along with Exs. P1 and P2 by the bank at the time of

dishonouring the cheques. Ex. P4 is the copy of the notice dated 27.9.2002 sent by the complainant to the accused as per Section 138(b) of the

Negotiable Instruments Act. Ex. P5 is the postal receipts dated 27.9.2002. Ex. P6 is the returned postal cover with an endorsement ""not claimed

by the accused. P.W. 1 has also produced Ex. P7 invoice bill and Ex. P8 balance sheet for the year 2002-03.

When incriminating circumstances were put to the accused, the accused would totally deny his complicity with the crime. He has examined

D.W. 1 and D.W. 2 and exhibited D1 to D6.

After going through the oral and documentary evidence, the learned trial Judge has held that the accused is guilty u/s 138 of the Negotiable

Instruments Act 1881 and convicted and sentenced him to one year simple imprisonment and slapped a fine of Rs. 5000/- with default sentence.

Aggrieved by the findings of the learned trial Judge, the accused had preferred an appeal in C.A. No. 52 of 2005 before the learned Additional

District Judge-cum-Fast Track Court No. 1, Erode. The learned first appellate Judge, after due deliberation to the submissions made by both

counsels and after going through the judgment of the learned trial Judge and after scanning the evidence both oral and documentary has ultimately

concurred with the findings of the learned trial Judge in respect of conviction and fine amount, but reduced the sentence to undergo nine months

rigorouos imprisonment instead one year rigorous imprisonment, which necessitated the accused to prefer this revision.

Now the point for determination in this revision is whether the findings of the first appellate Judge in C.A. No. 52/2005 is liable to be set aside

for the reasons stated in the memorandum of revision?

Heard Mr. V. Chandrasekaran, learned Counsel for the revision petitioner and Mr. N. Manoharan, learned Counsel appearing for the

respondent.

The point:

The accused in this case has not sent any reply notice to the notice issued by the complainant under the original of Ex. P4. He has not chosen to

receive the said notice, is seen from the endorsement in the returned cover Ex. P6 ""not claimed"". Under Ex. D3 statement of bank account of the

accused upto 28th September, 2002, a sum of Rs. 4,84,517.50ps was in credit. Ex. P1 is dated 18.7.2002 and Ex. P2 is dated 25.7.2002. The

accused had exhibited Ex. D3 statement of account through D.W. 2 to show that there is no sufficient credit in the account of the complainant to

lend loan of Rs. 3,00,000/- under Ex. P1 and a sum of Rs. 2,38,692/- under Ex. P2 cheque, But it is seen from Ex. D3 statement relating to the

complainant, itself that as on 19.7.2002 a sum of Rs. 3,77,667.50 was in credit in the account of the complainant. The accused has not taken any

steps to file the statement of account relating to the complainant relating to the period prior to 7th July 2002 to show that at any point of time, the

complainant was not having Rs. 3,00,000/- to lend to the accused. It is seen from Ex. D3 statement of account itself that the complainant had

sufficient fund even on 20.7.2002 to lend the same on 25.7.2002. So a vain attempt has been made before the trial Court by the accused to show

that the complainant had no sufficient fund to lend under Ex. P1 and Ex. P2 impugned cheques. Both the Courts below have come to a concurrent

finding that the offence u/s 138 of the Negotiable Instruments Act 1881 has been proved beyond any doubt against the accused to warrant

conviction and sentence under the abovesaid provision of law.

But the sentence awarded by the Courts below u/s 138 of the Negotiable Instruments Act 1881 cannot be sustainable in lieu of the dictum laid

down in Goa Plast (P) Ltd. Vs. Chico Ursula D''Souza, wherein in a case u/s 138 of the Negotiable Instruments Act while convicting the accused

u/s 138 of the Negotiable Instruments Act, the Honourable Apex Court has held that to meet the ends of justice, the accused shall be directed to

pay double the amount of the cheque giving some reasonable time to repay the same with default sentence. The relevant observation, in my view is

necessary to be extracted in this case which runs as follows:

We have no doubt that the respondent has committed an offence punishable under the provisions of Section 138 of the Act and is liable to be

punished. The transaction in question took place between the parties in the year 1993, therefore, Section 138, as it stood at the relevant time,

would be applicable to the present case. Section 138 provides imprisonment for a term which may extend to one year, or with fine which may

extend to twice the amount of the cheque, or with both. Section 138 has now been amended and the penalty of imprisonment for a term which

may extend to one year has been substituted by two years as provided by the amending Act of 2002 and the fine which may extend to twice the

amount of the cheque. This has been prescribed as the punishment for the offence u/s 138 of the Act. The object and the ingredients under the

provisions, in particular Sections 138 and 139 of the Act cannot be ignored. Proper and smooth functioning of all business transactions,

particularly, of cheques as instruments, primarily depends upon the integrity and honesty of the parties. In our country, in a large number of

commercial transactions, it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. The

sanctity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly, dishonour of a cheque by the

bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the

country suffers a serious setback. Parliament,in order to restore the credibility of cheques as a trustworthy substitute for cash payment enacted the

aforesaid provisions. The remedy available in a civil Court is a long-drawn matter and an unscrupulous drawer normally takes various pleas to

defeat the genuine claim of the payee.

After observing as above, the appeal was disposed of by the Honourable Apex Court giving a months time to the accused to pay a sum of Rs.

80,000/- being twice the amount of the cheque to the compensation to the appellant/complainant with default sentence of simple imprisonment for

six months. In my view, the same yardstick can be applied in this case also for disposing of the revision. The point is answered accordingly.

In the result, the revision is disposed of with the following modification:

The conviction against the accused by the first appellate Court in C.A. No. 52 of 2005 u/s 138 of the Negotiable Instruments Act 1881, is

confirmed but the sentence alone is modified by giving six months time from today to the accused to pay a sum of Rs. 10,77,384/- (Rupees Ten

lakhs seventy seven thousand three hundred and eighty four )only being the double the cheque amount (Ex P1 and Ex. P2) in default to suffer one

year simple imprisonment.