IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 28.10.2008 CORAM: THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYAN Crl.A.No.408 of 2002 Sakthi Ganesh Finance a Firm represented by its Managing Partner Chinnasamy .. Appellant/Complainant vs. C.Ashok Kumar .. Respondent/Accused This appeal has been preferred under section 378 of Criminal Proceedure Code against the Judgment dated 20.12.2001, in C.A.No.186 of 2001 on the file of Second Additional Sessions Judge, Erode against the Judgment dated 16.10.2001 in C.C.No.632 of 2000 on the file of Judicial Magistrate No.1, Erode. For Appellant : Mr.A.K.Kumarasamy,Advocate For Respondent : Mr.N.Manoharan,Advocate JUDGMENT This appeal has been preferred against the judgment in C.A.No.168 of 2001 on the file of Second Additional Sessions Judge, Erode which had arisen out of a Judgment in C.C.No.632 of 2000 on the file of Court of Judicial Magistrate No.1, Erode. 2. The appellant/complainant had preferred C.C.No.632 of 2000 under Section 138 of Negotiable Instruments Act(hereinafter referred to as N.I.Act) According to the complainant, the accused/respondent had borrowed a sum of Rs.1,50,000/- from the complainant/appellant on 4.3.1998 and executed a promissory note and the xerox copy of the same was marked before the trial Court as Ex P1. According to the complainant, upto 3.12.1998,the accused has paid the interest at the agreed rate under the original of Ex P1. To discharge the said loan,the accused had drawn a cheque for Rs.1,50,000/- . When the same was presented before the concerned Bank, the same was returned with an endorsement "Account closed". Thereafter, the complainant issued a notice on 21.9.2000 under the original of Ex P5 which was received by the accused under Ex P6 acknowledgment. After the receipt of original Ex P5 notice, the accused had drawn Ex P2 cheque for https://hcservices.ecourts.gov.in/hcservices/ Rs.2,15,000/- dated 12.9.2000 and that it is a post dated cheque which was handed over to him on 15.6.2000. When the said cheque was presented on 12.9.2000, the same was dishonoured on the ground that "insufficient funds" as per Ex P3 and Ex P4 advices. As per Ex P7 statement of account in September 2000,the accused was having only a sum of Rs.1684.50ps in his account. No exhibit was marked on the side of the accused and no oral evidence was also let in on the side of the accused. On the basis of the oral and documentary evidence let in on the side of the complainant, the trial Judge had come to a conclusion that the accused is guilty under Section 138 of N.I.Act and accordingly convicted and sentenced the accused to undergo six months rigorous imprisonment and a fine of Rs.5,000/- with default sentence. Aggrieved by the findings of the learned trial Judge, the accused has preferred an appeal before the first appellate Court in C.A.No.186 of 2001 on the file of Second Additional Sessions Judge, Erode. The first appellate Judge, after considering the submissions made by the learned counsel on both sides and after going through the materials placed before the trial Court, had allowed the appeal thereby setting aside the conviction and sentence imposed by the learned trial Judge in C.C.No.632 of 2000 and acquitted the accused from the charges levelled against him which necessitated the complainant to prefer this appeal. 3. Heard Mr.A.K.Kumarasamy, learned counsel for the appellant and Mr.N.Manoharan, learned counsel for the respondent and considered their rival submissions. 4. Now the point to be decided in this appeal is whether the offence under Section 138 of NI Act has been made out against the accused to warrant conviction under the said provision of law? 5.The point:- The learned first appellate Judge had set aside the conviction and sentence imposed by the learned trial Judge in C.C.No.632 of 2000 on the following grounds. a) The cheque amount under Ex P2 ie., Rs.2,15,000/- is not in conformity with the statement of account filed under Ex P11 produced by the complainant and that as per Ex P11, if the interest is calculated for the principal amount of Rs.1,50,000/- due for the period from 4.12.1998 to 15.6.2000 at the rate of Rs.3,150/- p.m., it comes to Rs.56,700/-and if this interest amount is added to the principal amount of Rs.1,50,000/-, the amount due comes to Rs.2,06,700/- but Ex P2 cheque was drawn by the accused for Rs.2,15,000/- and hence the learned first appellate Judge has held that Ex P2 is not drawn to discharge the subsisting liability. b) The other reasoning given in the first appellate Judge's Judgment for allowing the appeal is that in the cross examination P.W.1 has admitted that the cheque issued on 3.6.2000 was bearing cheque No.068920 whereas Ex P2 cheque No. is 068919 and hence no credence can be attached to the cheque which was admittedly drawn on 12.9.2000 https://hcservices.ecourts.gov.in/hcservices/ and earlier Cheque No. is 068919 whereas admittedly the earlier cheque dated 3.6 .2000 was bearing cheque No.068920, which gives suspecion regarding the drawal of Ex.P.2 cheque on 12.9.2000 as alleged by the complainant. 6. The learned counsel appearing for the respondent relying on a decision reported in Krishna Janardhan Bhat-v- Dattatraya G.Hegde (2008 SAR (criminal) 224 ) contended that non examination of the accused before the trial Court is not fatal to the defence raised by the accused and that the burden of proof is on the complainant to prove his case. Further basing his reliance on Section 139 of N.I.Act, the learned counsel for the respondent would contend that the burden of the complainant is to prove that the impugned cheque Ex P2 was drawn only for the purpose of discharging a subsisting liability as contemplated under Explanation to Section 138 of N.I.Act. The learned counsel has placed his reliance at paragraph 20 of the above said ratio wherein it has been held by the Honourable Apex Court as follows: "Indisputably, a mandatory presumption is required to be raised in terms of Section 118(b) and Section 139 of the Act. Section 13(1) of the Act defines "negotiable instrument" to mean" a promissory note, bill of exchange or cheque payable either to order or to bearer" Section 138 of the Act has three ingredients, viz., (i) that there is a legally enforceable debt; (ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which pre-supposes a legally enforceable debt' and' (iii) that the cheque so issued had been returned due to insufficiency of funds. The proviso appended to the said section provides for compliance of legal requirements before a complaint petition can be acted upon by a Court of law. Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of holder of the cheque that the same has been issued for discharge of any debt or other liability." 6. The learned counsel would further contend that the accused had discharged his initial burden that Ex P2 cheque was not drawn by the accused for discharging a subsisting liability and hence this Court cannot interfere with the findings of the learned first appellate https://hcservices.ecourts.gov.in/hcservices/ Judge who has given a clear finding as to the effect that amount due as on 15.6.2000 comes to only Rs.2,06,700/- whereas Ex P2 was drawn by the accused for Rs.2,15,000/- and hence the learned counsel would contend that the complainant has failed to discharge his burden and that the impugned cheque Ex P2 was drawn to discharge a legally enforceable debt. But Ex P11, statement of account produced by the complainant for the suit transactions coupled with Ex P13 series receipt issued by the complainant to the accused for payment made by the accused towards interest due shows that the accused had paid interest for the principal amount of Rs.1,50,000/- upto 3.12.1998. For the balance amount only the accused had drawn Ex P2 cheque on 12.9.2000 for a sum of Rs.2,15,000/-. There is no material placed before the trial Court to show that the accused had paid interest due from 4.12.1998 to 12.9.2000. ie., for a period of 21 months which comes to Rs.66,150/- and if the said interest of Rs.66,150/- is added to the principal amount of Rs.1,50,000/-, the amount due as on 12.9.2000 comes to Rs.2,16,150/-, which is below amount mentioned under Ex P2 cheque. It has been laid down in M.S.Narayana Menon Alias Mani-v-State of Kerala and another(2006)6 Supreme Court Cases 39). If the impugned cheque drawn by the accused in favaour of complainant for the amount larger than due or exist on the date of drawal of the cheque then on the basis of the impugned cheque , it cannot be construed that the said cheque was drawn to discharge a subsisting liability. The learned counsel appearing for the respondent relied on the following passage at paragraph 48 of the said ratio which runs as follows: "One of the cardinal principles which has always to be kept in view in our system of administration of justice for criminal cases is that a person arraigned as an accused is presumed to be innocent unless that presumption is rebutted by the prosecution by production of evidence as may show him to be guilty of the offence with which he is charged. The burden of proving the guilt of the accused is upon the prosecution and unless it relieves itself of that burden, the courts cannot record a finding of the guilt of the accused. There are certain cases in which statutory presumptions arise regarding the guilt of the accused, but the burden even in those cases is upon the prosecution to prove the existence of facts which have to be present before the presumption can be drawn. Once those facts are shown by the prosecution to exist, the Court can raise the statutory presumption and it would, in such an event, be for the accused to rebut the presumption. The onus even in such cases upon the accused is not as heavy as is normally upon the prosecution to prove the guilt https://hcservices.ecourts.gov.in/hcservices/ of the accused. If some material is brought on the record consistent with the innocence of the accused which may reasonably be true, even though it is not positively proved to be true, the accused would be entitled to acquittal."...............we in the facts and circumstances of this case, need not go into the question as to whether even if the prosecution fails to prove that a large portion of the amount claimed to be a part of the debt was not owing and due to the complainant by the accused and only because he has issued a cheque for a higher amount, he would be convicted if it is held that existence of debt in respect of large part of the said amount has not been proved. The appellant clearly said that nothing is due and the cheque was issued by way of security. The said defence has been accepted as probable. If the defence is acceptable as probable the cheque therefor cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act." The learned first appellate Judge had calculated interest only upto 15.6.2000 and arrived at figure that only a sum of Rs.2,06,700/- was due. But impugned cheque Ex P2 was for Rs.2,15,000/- which is higher than the amount due to the complainant and so has come to a conclusion that Ex P2 cheque is not for discharge of a subsisting liability. Forgetting a moment , the cheque dated 12.9.2000 , the interest is to be calculated upto 12.9.2000 in the absence of any evidence to show on the side of the accused that he had paid subsequent interest from 4.12.1998 to 12.9.2000 or any part of the same. If the interest is calculated upto 12.9.2000 and the same is added to the principal amount of Rs.1,50,000/-, the amount due to the complainant from the accused comes to Rs.2,16,150/- whereas Ex P2 impugned cheque was drawn only for Rs.2,15,000/- which is lessor than the amount due. Under such circumstances, Ex P2 impugned cheque was drawn by the accused only to discharge a subsisting liability. So the findings of the learned first appellate Judge that Ex P2 cheque was drawn to discharge the subsisting liability cannot hold any water. 7. The other contentions of the learned counsel appearing for the respondent that cheque dated 3.6.2000 was drawn in the cheque leaf bearing cheque No.068920 whereas the subsequent cheque under Ex P2 dated 12.9.2000 was drawn in the cheque bearing NO.068919. The said cheques were drawn by the accused. It is not the case of the accused that Ex P2 is a forged one. There is no dispute with regard https://hcservices.ecourts.gov.in/hcservices/ to the signatures of the accused contained in Ex P2. Presumption under Section 118 of the Indian Evidence Act is to the effect that only for a valuable consideration, the impugned cheque was drawn. The borrowal of Rs.1,50,000/- and also subsequent payment of interest upto 3.12.1998 has been proved by the complainant under Exs P11 to P14. Under such circumstances, the second limb of argument advanced by the learned counsel for the respondent is also not sustainable. 8.Relying on Kamala,S.-v.Vidhyadharan M.J and another(2007)5 SCC 264) and also C.Antony-v- K.G.Raghavan Nair(2003(1) S.C.C 1),the learned counsel appearing for the respondent would contend that this Court while exercising the powers of Second appellate Court cannot interfere with the order of acquittal of the Court below and cannot reappreciate the evidence in appeal. There cannot be two opinion with regard to the law laid down under the above said dictums. But when it is brought to the Court that prima facie, the first appellate Court has committed an error in coming to a conclusion that the impugned Cheque Ex P2 is not for discharging the subsisting liability on the basis of a wrong calculation, this Court is bound to interfere with to set right mistakes committed by the Court below. Under such circumstances, I am of the view that the findings of the learned first appellate Judge is liable to be set aside and the same is hereby set aside. 9. In fine, the appeal is allowed and the Judgment of the learned first appellate Judge in C.A.No.186 of 2001 on the file of Second Additional Sessions Judge, Erode is set aside and the accused is convicted under Section 138 of Negotiable Instruments Act. For question of sentence, the accused is directed to appear before this Court on 31.10.2008. 28.10.2008 31.10.2008 When the appeal was taken up for question of sentence, the accused is present. Learned counsel appearing for the accused Mr.N.Manoharan has filed an affidavit stating that if six weeks time is given, he will settle the entire issue. Learned counsel appearing for complainant Mr.A.K.Kumarasamy has no objection for granting five (5)weeks time for filing memo of compromise. Post on 05.12.2008 under the caption 'For Reporting Settlement'. Recall the warrant, Since the accused is present today. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To 1. The Judicial Magistrate No.1, Erode 2. -do- the Chief Judicial Magistrate, Erode 3. The II Additional Sessions Judge, Erode 4.-do- the District and Sessions Judge, Erode. Copy to The Section Officer, Criminal Section, High Court of Madras, Madras. Crl.A.No.408 of 2002 VM(CO) SRA(6/11/2008) https://hcservices.ecourts.gov.in/hcservices/