IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 18.10.2011 Coram THE HONOURABLE MS. JUSTICE K.B.K.VASUKI Crl.A.No.932 of 2003 S.P.Subbaraman .. Appellant/Complainant Vs. A.K.Mahendran Proprietor KVN Hardwares (Now Arunlancy Stores) .. Respondent/Accused Prayer:- Criminal Appeal is filed under Section 378 of Criminal Procedure Code against the judgment dated 23.4.2003 made in C.C.No.3891 of 1997 on the file of the XV Metropolitan Magistrate, George Town, Chennai. For Appellant : Mr.S.Sathish Rajan For Respondent : Mr.B.R.Sankaralingam J U D G E M E N T The complainant is the appellant herein. The appeal is filed against the order of acquittal of the respondent from the charge constituting the offence punishable under Section 138 of Negotiable Instruments Act. 2.The complaint proceeds as if the accused is carrying on hardware business under the name and style of M/s.KVN Hardwares and he borrowed Rs.2,00,000/- on 11.3.1997 to improve his business and agreed to repay the same with interest at 30% p.a. and thereafter he did not either pay interest or principal and when the complainant demanded the amount, he issued a cheque dated 20.5.1997 and the same was presented for collection on 24.5.1997 and the same was returned dishonoured on 26.5.1997 on the ground that “account closed” and the same was intimated to the accused through statutory notice dated 29.5.1997 thereby calling upon the accused to discharge his liability and though the accused received the notice, failed to repay the amount within 15 days and thereby he committed the act constituting the offence punishable under Section 138 of Negotiable Instruments Act. 3.The complainant has in order to prove his theory as stated above, examined himself and the Bank Manager of both the complainant https://hcservices.ecourts.gov.in/hcservices/ as well as the accused as PW1 to PW3 and produced the pronote, cheque in question, return memo and debit advise issued by the bank, copy of the statutory notice issued by the complainant to the accused, postal acknowledgment card, authorisation letter and the statement of account of the accused as Exs.P1 to P8. No oral and documentary evidence is adduced on the side of the accused. 4.The trial court, having found that the accused closed his business and bank account as early as on 1993 and having found number of infirmities in the material documents produced on the side of the complainant, particularly pro note and cheque, arrived at a conclusion that the complainant obtained blank signed cheque from the accused and misused it to file the false case and acquitted the accused as no ingredient for the offence under Section 138 of Negotiable Instruments Act is made out. Aggrieved against the same, the complainant preferred the present appeal before this Court. 5.The learned counsel for the appellant/complainant would seriously question the correctness of the judgment of conviction recorded by the trial court mainly by relying on the failure of the accused to issue reply notice and to examine himself in respect of the defence raised on his side that business and bank account was closed during 1993 and the accused borrowed only Rs.50,000/- from the complainant long before and the same was repaid with interest and blank cheque issued during earlier transaction was misused by the complainant. 6.Whereas, the learned counsel for the respondent/accused has drawn the attention of this court to the evidence of PW1 to defend the trial court judgment. It is argued by the learned counsel for the respondent that it is the complainant who failed to establish his case and the order of acquittal is based on evidence and is supported by reasoning and the finding rendered by the trial court does not deserve any interference by this court. 7.Heard the rival submissions made on both sides and perused the records. 8.While according to the complainant, borrowal is during March 1997 for improving hardware business of the accused under the name and style of M/s.K.V.N Hardwares, the main defence raised by the accused herein is that business and bank account was closed as early as on 1993 and no money transaction was effected during 1997. It may be true that the accused did not send any reply to the statutory notice issued by the complainant and not entered the witness box in support of his defence so raised by him. That by itself will not automatically go to reject his defence in view of the latest three judge bench judgement of the Supreme Court reported in 2010 (4) CTC 118 (Rangappa v. Sri Mohan), wherein, our Apex court clearly observed that when an accused https://hcservices.ecourts.gov.in/hcservices/ has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities' and he did not adduce any evidence of his own and he can discharge the burden cast upon him by relying upon the materials produced on the side of the prosecution and can himself be entered into witness box. (The judgment reported in 2001 Crl.LJ 4745 – K.N.Beena v. Muniyappan and another, relied on by the learned counsel for the appellant, stands contradicted). 9.Here is the case wherein the evidence of PW3-Bank Manager of the accused clearly established the part of the defence raised by the accused that the bank account was closed during 1993. Regarding closure of his business, it is specifically suggested to PW1 in the course of his cross examination, but PW1, who advanced huge money of Rs.2,00,000/- for hardware business of the accused, would neither admit nor deny the suggestion put to him. The answer given by PW1 for the question as to whether the business of the accused and his bank account was closed during 1993, is evasive in nature and he pleaded only ignorance of the factum of closure of the hardware business of the accused. Had it been true that the amount advanced is for business purpose, the complainant ought to have categorically denied the suggestion put to him and the evasive answer given by him led to disbelieve the case of the complainant. In that event, the accused would not have issued a cheque for Rs.2,00,000/- relating to his bank account which was already closed during 1993 and he would not have borrowed the said sum during 1997 for business purpose which was also closed during 1993. 10.Further, PW1 would in his evidence say that the advancement of the amount was agreed to be repaid with interest at 30% p.a and Ex.P1- pronote was executed for due repayment of the amount borrowed on the said date and Ex.P2-cheque was issued when principal was demanded, in that event, the cheque ought to have been issued towards both principal and interest for two months. It is nobody's case that interest part is waived and the cheque is issued only for principal amount. Further, it is hardly believable that the sum of Rs.2 lakhs was obtained as loan on 11.3.1997 and the post dated cheque (dated 20.5.1997) towards repayment of the same was issued within two months from the date of receipt of such advancement. 11.The cursory glance at Exs.P1 pronote and P2-cheque reveals that the pronote is not executed in the manner as prescribed under law and certain material particulars are not filled up in the same and no one signed as witness for the execution of the document. Further, PW1 categorically admitted that the particulars are filled up by a person who accompanied the accused at the time of borrowal of the amount. Thus, Ex.P1 is necessarily to be treated as incomplete one and the same cannot be relied upon. Insofar as Ex.P2 cheque is concerned, https://hcservices.ecourts.gov.in/hcservices/ the same is admittedly not filled up by the accused. Even otherwise when the amount is agreed to be repaid with interest that too, exorbitant rate of interest at 30% p.a., the complainant did not explain as to why repayment for both principal and interest was not demanded and as to why the cheque was issued only for principal amount and not for principal and interest. Further, it is categorically admitted by PW1 that the same is filled up neither by the complainant nor the accused, but only by another person who allegedly accompanied the accused and the particulars of other person are not furnished herein. Further, the cheque is filled up and signed by using two different inks. Thus, the complainant did not duly establish that it is issued in the manner as produced before this court. Though the complainant would say that the account was maintained for the amount lent to the accused, the said account is not produced in support of his case for perusal of this court and if the same is viewed in the light of the theory of PW1 as spoken in the witness box that he used to advance money to unknown persons for the past 10 years and the amount remained as outstanding was to the tune of Rs.10,00,000/-, the same appears to be unbelievable. It is equally unexplained that the complainant being an IT assessee did not inform Income Tax department about the payment of Rs.2 lakhs by way of loan to the accused. 12.Thus, overall appreciation of the factors as discussed above would lead to an irreparable conclusion that the complainant failed to establish the guilt of the accused for the offence under section 138 of Negotiable Instruments Act. As it is well settled law that when two views are possible and one is in favour of the accused for the order of acquittal and the other is in favour of the complainant, the one in favour of acquitting the accused shall be adopted and it is rightly done so by the trial court and unless and otherwise the complainant is able to make out compelling and sound reason or good and satisfactory case against the correctness of the order of acquittal, the same does not call for any interference by this court. 13.In the result, the criminal appeal is dismissed. Sd/- Asst.Registrar(CS II) 13.3.2014 /True Copy/ Sub Asst.Registrar rk https://hcservices.ecourts.gov.in/hcservices/ To 1.The XV Metropolitan Magistrate, George Town, Chennai. 2.-do- Thro' The Chief Metropolitan Magistrate, Egmore, Chennai-8. 3.The Section Officer, Criminal Section, High Court,Madras. RBD (CO) km/17.3.2014 Crl.A.No.932 of 2003 https://hcservices.ecourts.gov.in/hcservices/