THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY CRIMINAL APPEAL No. 673 of 2005 DATE:24.08.2009 Between: M/s. Volga Chit Fund (P) Limited, represented By its Asst.Legal Manager, Ammeerpet, Hyderabad. … Appellant And The A.P. state and another … Respondents THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY CRIMINAL APPEAL No. 673 of 2005 JUDGMENT: This appeal is directed against the judgment dated 14.02.2003 in C.C.No.225 of 2000 on the file of the III Metropolitan Magistrate, Hyderabad, wherein 2nd respondent-accused was found not guilty of an offence under Section 138 of the Negotiable Instruments Act (for short ‘the Act’) and acquitted of the same. Heard the learned counsel for the appellant- complainant company and the learned counsel for the 2nd respondent-accused and perused the record. The appellant herein filed a private complaint against the 2nd respondent alleging an offence under Section 138 of the Act in C.C.No.225 of 2000 on the file of the III Metropolitan Magistrate, Hyderabad. According to the complainant, the accused joined as a subscriber for chit bearing No.VST/02-10 for value of Rs.3,00,000/-. The chit amount has to be paid in 40 instalments at the rate of Rs.7,500/- p.m. The accused became a successful bidder in the auction held on 20.10.1998 and withdrew the prize amount. After paying 8 instalments, he committed default and failed to pay the remaining 22 instalments. It is further alleged that towards the amount due, the accused issued a cheque-Ex.P.1 for Rs.72,645/- and when the same was presented for encashment, it was returned dishonoured vide a memo-Ex.P.2 with an endorsement “insufficient funds”. Thereafter, it has got issued a legal notice-Ex.P.3 under a postal receipt Ex.P.4 and a certificate of posting- Ex.P.6 and the same was received by the accused under a postal acknowledgment-Ex.P.6. The accused gave a reply-Ex.P.7, but he did not pay the amount. The accused denied that he was a member of the chit bearing No. VST/02-10 or that he participated in the auction of the said chit or that he received any prize amount or that he paid any instalments or that he committed any default. He also denied having issued the cheque-Ex.P.1 in discharge of any liability in respect of the chit bearing No.VST/02-10. According to him, he was a member of another chit bearing No. VST/02-12 and he paid all the instalments pertaining to the said chit regularly till its completion, and at that time he gave a signed blank cheque as security for the amount due in respect of the chit No. VST/02-12 and taking advantage of the said cheque available with it, the complainant has fabricated the cheque-Ex.P.1 by filling the contents and pressed it into service in respect of the chit No.VST/02-10, with which he has no concern. According to him, one Dalpath Singh-D.W.1 was introduced by him to the complainant company and D.W.1 joined as a member in the chit bearing No.VST/02-10. The liability of D.W.1 in payment of instalments cannot be fastened on him, simply because he introduced D.W.1. He also denied that there was any legally enforceable liability subsisting against him, and therefore, the ingredients of the offence under Section 138 of the Act are not attracted. In the trial court, the Assistant Legal Manager of the complainant company was examined as P.W.1, but after recording his evidence in chief, he did not turn up for cross-examination, and therefore, his evidence was eschewed. Thereafter, P.W.2, the Senior Accounts officer of the complainant company, was examined, and Exs.P.1 to P.11 were marked on the complainant side. Dalpath Singh was examined as D.W.1 and N.P.Ramarao, a clerk of the complainant company, was examined as D.W.2 and Exs.D.1 to D.9 were marked on behalf of the accused. On a consideration of the material on record and on proper appreciation of the entire evidence, the trial court by a detailed and reasoned judgment recorded a finding that there was no legally enforceable debt subsisting against the accused and the cheque-Ex.P.1 was not shown to have been issued in discharge of any such debt, and therefore, the ingredients of the offence under Section 138 of the Act are not attracted and the presumption contained under Section 139 of the Act is also not available for the complainant. Accordingly, the trial court found the accused not guilty and acquitted him of the said offence. Aggrieved by the same, the present appeal is filed by the complainant company. A perusal of the impugned judgment would show that the learned Magistrate has considered all the relevant aspects of the case with reference to the evidence available on record and gave clear and categorical reasons in support of the finding recorded. As rightly observed by the learned Magistrate, the evidence adduced by the complainant does not fit in with the pleas raised in the complaint. On the other hand, the various admissions made by P.W.2 coupled with the evidence of D.Ws. 1 and 2 and Exs.D.1 to D.9 would establish the plea of the accused that he was not a member of the chit No.VST/02-10 and he was only a member of the other chit No. VST/02-12. The evidence on record also established the fact that it was D.W.1 who was the subscriber of the chit No.VST/02- 10. Admittedly, the complainant company issued pass books-Exs.D.1 and D.2. The pass book-Ex.D.1 would show that it was given to the accused in respect of the chit No.VST/02-12 of which he was admittedly a member and the pass book-Ex.D.2 was given to D.W.1 in respect of the chit No. VST/02-10. It is also significant to note that the statement of account-Ex.P.8 prepared by P.W.2 shows the payments covered by the receipts-Exs.D.3 to D.8 which were issued in the name of D.W.1, but not the accused. As rightly calculated and observed by the trial court, the alleged period of default, namely 22 months, does not fit in with the date of issuance of the cheque-Ex.P.1 and the amount covered by Ex.P.1 does not also tally with the amount found due by the accused, on account of the alleged default in respect of 22 instalments. The accused is said to have joined the chit No.VST/02-10 on 20.10.1998. Surprisingly, the auction is said to have taken place on the same day and according to the complainant, the accused paid 8 instalments and committed default in respect of the remaining 22 instalments. When the total number of instalments is said to be 40, it is not known how the accused could pay 8 instalments and committed default in respect of 22 instalments. As rightly observed by the trial court, it is highly improbable that the accused would have paid four instalments at the rate of Rs.7,500/- p.m. i.e. in a total amount of Rs.30,000/- even by the date of joining the chit in advance, as deposed by P.W.2, when the period of instalments counted from the date of commencement i.e. 20.10.1998. According to the complainant, the accused paid the instalments till May, 1999 and committed default thereafter for 22 months and the said period of 22 months would end by March, 2001, whereas the statutory notice- Ex.P.3 was issued much prior to March, 2001 i.e. on 18.04.2000 itself, and even the complaint was filed on 31.05.2000. Thus, the plea of the complainant that the accused paid 8 instalments and committed default in respect of the remaining 22 instalments, does not at all fit in with the date of issuance of the notice-Ex.P.3 or with the date of filing of the complaint. Similarly, at the rate of Rs.7,500/- p.m. the total amount due for 22 months would come to Rs.1,65,000/-, whereas the cheque-Ex.P.1 is said to have been issued only for a sum of Rs.72,645/-. Thus, the amount of the alleged liability is also not tallied and the cheque-Ex.P.3 was issued for a different amount altogether. This necessarily leads to the inference that the alleged transaction and the documents relating thereto do not really pertain to the chit No.VST/02-12 of which the accused was admittedly a member and the same relates to some other chit No.VST/02-10 of which D.W.1 was a subscriber. In fact, D.W.1 himself deposed that he was a member of the chit No. VST/02-10 and the accused has nothing to do with the same. The evidence of D.W.2, who is no other than the clerk of the complainant company, would go to show that at the time of joining as a member of the chit No. VST/02-12, the accused has handed over to him a signed blank cheque by way of security, but the same was not returned to him, after completion of the said chit. This evidence of D.W.2 would clearly establish the plea of the accused that the signed blank cheque issued by him as a security, while joining as a member of the chit No. VST/02-12, was pressed into service in respect of the amount alleged to be due by D.W.1 towards the chit No.VST/02-10, simply because he happened to introduce D.W.1 as a member. To get over the difficulty, it is sought to be argued on behalf of the complainant company that the chit No.VST/02-10, which was initially started in the name of D.W.1, was subsequently transferred in the name of the accused all through and the accused committed default in payment of the instalments due by D.W.1. The said plea was, however, not raised in the complaint, nor there is any evidence in that regard. It is obvious that such an argument is put forward only in a vain attempt to get over the adverse situation in which the complainant was unable to answer the various questions raised by the learned Magistrate in the impugned judgment which throw any amount of doubt over the genuineness of the contention of the complainant. It is significant to note that the complainant has not disclosed anywhere as to the date on which the accused participated in the auction of the chit No.VST/02-10 and how much prize amount he received on what date and by what means. On the other hand, the evidence on record throws any amount of doubt over the claim of the complainant and in fact it shows that the accused has nothing to do with the chit No.VST/02-10 of which D.W.1 was a member. As there was no legally enforceable liability of the accused for discharge of any amount due under the chit No. VST/02-10, the presumption contained under Section 139 of the Act is also not available for the complainant. The evidence on record also established that the cheque-Ex.P.1 was not issued by the accused in respect of the chit No.VST/02-12 and a signed blank cheque given by him in connection with the other chit No.VST/02-10 was pressed into service by the complainant. In those circumstances, it is held that the complainant has miserably failed to establish that the accused was a member of the chit No.VST/02-10 or that he paid any instalments towards the same or that he committed default later and in discharge of any such liability, he issued the cheque-Ex.P.1. It is also held that the impugned judgment of the trial court acquitting the accused of the offence under Section 138 of N.I. Act does not call for any interference by this court. In the result, the criminal appeal is dismissed. ____________________ G. V. SEETHAPATHY, J 24th August, 2009. CBS THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY CRIMINAL APPEAL No. 673 of 2005 (Dismissed) 24th August, 2009 CBS