IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 09.03.2010 CORAM: THE HONOURABLE MS.JUSTICE R.MALA Crl.A.No.294 of 2000 & Crl.M.P.Nos.3628 of 2000, 9203 of 2001 and 12098 of 2002 A.Krishna Reddy ..Appellant/Complainant Vs. P.V.R.S.Mani Kumar ..Respondent/Accused Criminal Appeal filed under Section 378(4) r/w Sec.382 Cr.P.C. against the judgment dated 6.12.1999 in Crl.A.No.127 of 1999 on the file of III Additional Sessions Court, Chennai, against the judgment dated 26.4.1999 in C.C.No.3316 of 1998 on the file of VII Metropolitan Magistrate, George Town, Chennai. For Appellant : Mr.A.N.Thambidurai For Respondent: Mr.C.Rajan and Mr.V.K.Sathiamurthy JUDGMENT The Criminal Appeal is taken up for disposal, on remand from the Supreme Court, by order dated 29.3.2007 in Crl.A.Nos.597 to 599 of 2003 and 775 of 2003, whereby, the Supreme Court observed as follows: "Without going into the merit of the case and in view of the fact that now new materials are available on record, we think it fit and proper to set aside the judgment of the High Court and remit the matter back to the High Court for consideration of the matter afresh in the light of the evidences adduced on behalf of the appellant." 2. The Criminal Appeal is filed against the judgment dated 6.12.1999 in Crl.A.No.127 of 1999 on the file of III Additional Sessions Court, Chennai, against the judgment dated 26.4.1999 in C.C.No.3316 of 1998 on the file of the VII Metropolitan Magistrate, George Town, Chennai. 3. The appellant as complainant, has filed a private complaint stating that the respondent-accused has borrowed money from him and https://hcservices.ecourts.gov.in/hcservices/ after some time, the respondent-accused issued two cheques, one dated 31.3.1998 for Rs.6,60,000/- and another dated 31.3.1998 for Rs.7,25,920/-, both drawn on Syndicate Bank, Perambur, Chennai. The first cheque represented the principal amount and the second cheque represented the interest upto 31.3.1998. The appellant-complainant deposited the said cheques on 31.3.1998. Both the cheques were dishonoured by the Bank on 2.4.1998, stating "insufficient funds". The appellant-complainant issued lawyer's notice dated 6.4.198 and the appellant-complainant received reply notice dated 17.4.1998 and then, the appellant issued rejoinder on 21.4.1998 and filed the complaint in accordance with law, under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the N.I. Act'). 4. The trial Court, after taking cognizance of the offence under Section 138 of the N.I. Act, issued summons to the respondent-accused and after questioning the accused, examining P.Ws.1 to 3 and D.W.1 and marking Exs.P-1 to P-16 and Ex.D-1 to D-3, by judgment dated 26.4.1999, convicted the respondent-accused for the offence under Section 138 of the N.I. Act and sentenced him to undergo simple imprisonment for one year and to pay a fine of Rs.13,87,000/-, in default, to undergo simple imprisonment for one month and out of the fine amount, the trial Court directed the complainant to pay Rs.13,86,000/- as compensation. 5. Against the said judgment of the trial Court, the respondent- accused preferred appeal in Crl.A.No.127 of 1999, and the first appellate Court allowed the appeal filed by the respondent-accused and set aside the conviction and sentence passed by the trial Court and acquitted the respondent-accused of the charge under Section 138 of the N.I. Act and also directed to refund the fine amount, if paid. 6. Against the said judgment of the first appellate Court, the appellant-complaint has filed the present appeal Crl.A.No.294 of 2000 before this Court, and this Court, by judgment dated 13.12.2002, allowed the appeal, by reducing the sentence of simple imprisonment to three months and also reduced the amount of compensation to Rs.6,60,000/-, and deleted the sentence of fine of Rs.1,000/-. 7. Against the said judgment dated 13.12.2002 passed by this Court, the parties preferred appeals before the Supreme Court and the Supreme Court, by judgment dated 29.3.2007 in Crl.A.Nos.597 to 599 of 2003 and 775 of 2003, remanded the case as indicated above and the appeal is now heard afresh. 8. On remand from the Supreme Court, now this Court has to decide as to whether the respondent-accused is guilty of the offence under Section 138 of the N.I. Act. 9. After hearing the arguments of both sides, the only dispute to be decided is as to whether on the date of issuance of the cheques https://hcservices.ecourts.gov.in/hcservices/ in question, there is any subsisting liability on the part of the respondent-accused. 10. Learned counsel for the appellant-complainant would contend that the handing over of the cheques in question, has been admitted by the respondent-accused and hence, the presumption of facts, under Sections 118(a) and 139 of the N.I. Act and Sections 3 and 4 of the Indian Evidence Act, be drawn from the existence of certain facts and the presumption drawn in respect of one fact may be used for the purpose of drawing presumption under another fact. The first appellate Court has not considered this aspect in proper perspective. 11. Learned counsel for the appellant-complainant further contended that the respondent-accused borrowed Rs.6,60,000/- on 30.6.1994 and executed a promissory note Ex.C-1 and on 5.5.1997, the respondent-accused paid only Rs.10/- and made an endorsement on the back of Ex.C-1. Since he was not in a position to discharge the loan amount due on promissory note Ex.C-1, the respondent-accused earlier issued two cheques, one dated 30.9.1997 for Rs.6,60,000/- and the other dated 31.10.1997 for Rs.5,80,000/- by calculating interest upto 30.10.1997. 12. Learned counsel for the appellant-complainant, focussed his argument on the basis of Ex.P-3 letter addressed by the respondent- accused to the appellant-complainant, dated 27.9.1997, in his own handwriting in Telugu and the English translation copy of the same is Ex.P-4. The other letter Ex.P-5 (Telugu) and Ex.P-6 (English translation), dated 29.10.1997 also was in his own handwriting and along with Ex.P-5 letter, the respondent-accused sent cheque to the appellant-complainant, for Rs.49,600/- for interest. 13. Learned counsel for the appellant-complainant submitted that along with the two cheques in question which were marked as Exs.P-7 and P-8, the respondent-accused sent a letter Ex.P-9 to the appellant-complainant on 15.12.1997. Since the other two cheques earlier issued by the respondent-accused, which were presented for encashment, returned dishonoured and since even the present two cheques Exs.P-7 and P-8 also returned dishonoured, the appellant- complainant issued notice Ex.P-13, through his counsel and the reply was received from the respondent-accused through his counsel, under Ex.P-14 and the rejoinder/notice was issued by the appellant- complainant, through his counsel, under Ex.P-15. 14. Learned counsel for the appellant-complainant further contended that even though the trial Court has come to the correct conclusion, the first appellate Court has committed error in allowing the appeal. After the earlier order of the Supreme Court, D.Ws.2 and 3 were examined and Exs.D-4 to D-60 were marked on the side of the respondent-accused. Learned counsel for the appellant-complainant further submitted that Ex.P-13 notice issued on behalf of the https://hcservices.ecourts.gov.in/hcservices/ appellant-complaint, to the respondent-accused, is valid under law. As per Exs.P-3 to 6 and Ex.P-9, issuance of cheques in question, was admitted. So, the loan received also had been proved and hence, on the date of issuance, the cheques Exs.P-7 and P-8, were given only for discharge of the loan obtained by the respondent-accused on 30.6.1994 under Ex.C-1 promissory note. 15. Learned counsel for the appellant-complainant relied upon the decisions of the Supreme Court reported in AIR 2000 SC 828 = 2000 (2) SCC 380 (Suman Sethi Vs. Ajay K.Churiwal) and 2001 AIR SCW 2352 (2) = 2001 (10) SCC 763 (United Credit Ltd., Calcutta Vs. Agro Sales India and others) and submitted that the first appellate Court has allowed the appeal on the ground that in the notice Ex.P-13, the appellant-complainant claimed further interest along with the cheque amounts and so, it is not notice coming under Section 138 of the N.I. Act and acquitted the respondent-accused. Hence, he relied upon the said decisions and argued that Ex.P-13 notice is valid under law and so, the cause of action for filing the private complaint has arisen on Ex.P-13 and that factum has been considered by the trial Court. Learned counsel for the appellant-complaint also relied upon the decision of the Supreme Court reported in AIR 1999 SC 3762 = 1999 (7) SCC 510 (K.Bhaskaran Vs. Sankaran Vaidhyan Balan) and a decision of this Court reported in 1999 (I) CTC 6 (Balaji Seafoods Exports (India) Ltd. Vs. Mac Industries Ltd.), in support of his contentions. He prayed for allowing the Criminal Appeal and setting aside the judgment of acquittal passed by the first appellate Court. 16. Learned counsel for the respondent-accused would submit that the respondent never borrowed any money. P.W.1 Krishna Reddy, the appellant-complainant, D.W.1 Narayana Gupta, D.W.2 Raghunatha Reddy and Manikumar, the respondent-accused, were close friends, that the cheques were misused and in the private complaint, the appellant- complainant has not mentioned the date and other details of promissory note and the same were also not mentioned in Ex.P-13 notice and Ex.P-15 rejoinder. Even though Ex.C-1 is of the year 1994, it was given only in the year 1997. Ex.P-9 which is the letter stated to have written by the accused to the complainant, is concocted and not true and genuine document. For non-production of income tax returns/documents, adverse inference ought to have been drawn against the appellant-complainant and the documents produced by the appellant-complainant before the Court will reflect that those documents are concocted for the purpose of the case. Learned counsel for the respondent-accused relied upon the decision of the Supreme Court reported in 2006 (3) CTC 730 (SC) = 2006 (6) SCC 39 (M.S.Narayana Menon @ Mani Vs. State of Kerala) and submitted that the respondent-accused is not called upon to prove the negative. He also relied upon the decisions of the Supreme Court reported in 2008 (4) SCC 54 (Krishna Janardhan Bhat Vs. Dattatraya G.Hedge) and 2003 (4) CTC 252 (SC) = 2003 (8) SCC 300 (K.R.Indira Vs. Dr.G.Adinarayana) and submitted that the notice of demand in Ex.P-13 is bad in law. https://hcservices.ecourts.gov.in/hcservices/ Learned counsel for the respondent-accused prayed for dismissal of the Criminal Appeal. 17. The point to be decided is as to whether Ex.P-13 notice is valid under law and whether it gives any cause of action for preferring the complaint. 18. Exs.P-7 and P-8 cheques and the signatures in those cheques, are admitted by the respondent/accused. When those cheques were presented for encashment, they were returned by the Bank as per the letters of the Bank in Exs.P-10, 11 and 12 and then only, the appellant-complainant issued notice under Ex.P-13 on 6.4.1998 and complaint has been filed within time. 19. Learned counsel for the appellant-complainant relied upon the decision of the Supreme Court reported in AIR 2000 SC 828 = 2000 (2) SCC 380 (Suman Sethi Vs. Ajay K.Churiwal), in which, the Supreme Court held in paragraphs 8 and 10, as follows: "8. It is well settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the "said amount" i.e. cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where, in addition to "said amount" there is also a claim by way of interest, cost, etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving up break-up of the claim the cheque amount, interest, damages, etc. are separately specified, other such claims for interest, cost, etc. would be superfluous and these additional claims would be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, notice might well fail to meet the legal requirement and may be regarded as bad." "10. In Section 138 Legislature clearly stated that for the dishonoured cheque the drawer shall be liable for conviction if the demand is not made within 15 days of the receipt of notice but this is without prejudice to any other provision of the Act. If the cheque amount is paid within the above period or before the complaint is filed the legal liability under Section 138 will cease and for recovery of other demands as compensation, costs, interest, etc., a civil proceeding will lie. Therefore, if in a notice any other sum is indicated in addition to the "said amount" the notice cannot be faulted, as stated above." 20. While perusing Ex.P-13, it is stated in paragraph 3 therein that the first cheque issued for Rs.6,60,000/- represented the https://hcservices.ecourts.gov.in/hcservices/ principal amount and the second cheque issued for Rs.7,25,920/- represented the interest. In paragraph 6 in Ex.P-13, the complainant claimed that, "The above two Cheques were in substitution of the two Cheques dt.30.9.1997 (Nos.746780 & 746779) for Rs.6,60,000/- and for Rs.5,80,000/- respectively, which you could not honour.", whereas in paragraph 11, the appellant-complainant claimed the entire payment at Rs.13,85,920/- by stating that, " .... ... my client hereby gives you fifteen days from now, under Sec.138 of the Negotiable Instruments Act, to effect the entire payment of Rs.13,85,920/- (Rs. Thirteen lakh eighty-five thousand nine hundred and twenty), together with further interest upto the date of actual payment by Banker's Cheque or Demand Draft.". In such circumstances, the total amount varies from the present two cheques issued and the earlier two cheques issued and in support of this contention, learned counsel for the respondent-accused would rely upon the decision of the Supreme Court reported in 2003 (4) CTC 252 (SC) = 2003 (8) SCC 300 (K.R.Indira Vs. Dr.G.Adinarayana), in which, the Supreme Court relied on the decision reported in AIR 2000 SC 828 = 2000 (2) SCC 380 (cited supra) and observed as follows: "11. Strong reliance was placed by the learned counsel for the appellants on Suman Sethi case (Suman Sethi Vs. Ajay K.Churiwal and another) (2000 (2) SCC 380) to contend that if the indication in the notice of other amounts than that covered by the cheque issued, does not as held by this Court invalidate the notice, there is no reason as to why a consolidated notice for two complainants cannot be issued. The extreme plea as is sought to be raised in this case based upon Suman Sethi's case (Suman Sethi Vs. Ajay K.Churiwal and another) (2000 (2) SCC 380) is clearly untenable. Though no formal notice is prescribed in the provision, the statutory provision indicates in unmistakable terms as to what should be clearly indicated in the notice and what manner of demand it should make. In Suman Sethi's case (Suman Sethi Vs. Ajay K.Churiwal and another) (2000 (2) SCC 380) on considering the contents of the notice, it was observed that there was specific demand in respect of the amount covered by the cheque and the fact that certain additional demands incidental to it, in the form of expenses incurred for clearance and notice charges were also made, did not vitiate the notice. In a given case if the consolidated notice is found to provide sufficient information envisaged by the statutory provision and there was a specific demand for the payment of the sum covered by the cheque dishonoured, mere fact that it was a consolidated notice, and/or that further demands in addition to the statutorily envisaged demand were also found to have been made may not invalidate the same. This position could not be disputed by the learned counsel for the respondent. However, according to the respondent, the notice in question is not https://hcservices.ecourts.gov.in/hcservices/ separable in that way and that there was no specific demand made for payment of the amount covered by the cheque. We have perused the contents of the notice. Significantly, not only the cheque amounts were different from the alleged loan amounts but the demand was made not of the cheque amounts but only the loan amount as though it is a demand for the loan amount and not the demand for payment of the cheque amount, nor could it be said that it was a demand for payment of the cheque amount and in addition thereto made further demands as well. What is necessary is making of a demand for the amount covered by the bounced cheque which is conspicuously absent in the notice issued in this case. The notice in question is imperfect in this case not because it had any further or additional claims as well but it did not specifically contain any demand for the payment of the cheque amount, the non-compliance with such a demand only being the incriminating circumstance which exposes the drawer for being proceeded against under Section 138 of the Act. That being the position, the ultimate conclusion arrived at by the trial court and the High Court does not call for interference in these appeals, though for different reasons indicated by us. The appeals are, accordingly dismissed." 21. Learned counsel for the appellant-complainant also relied upon the decision of the Supreme Court reported in 2001 AIR SCW 2352 (2) = 2001 (10) SCC 763 (United Credit Ltd., Calcutta Vs. Agro Sales India and others), in which, while referring to the decision reported in AIR 2000 SC 828 = 2000 (2) SCC 380 (Suman Sethi Vs. Ajay K.Churiwal), the Supreme Court observed as follows: "Leave granted. 2. The complainant is the appellant before us. A complaint having been filed under Section 138 of the Negotiable Instruments Act, the Magistrate dismissed the complaint holding the notice itself to be invalid as the notice contained not only the amount covered by the cheque but also some other amount towards interest and costs. The complainant moved the High Court by filing a revision petition and the High Court having dismissed the same, the complainant is before us. 3. The question of our consideration, therefore, is whether the impugned notice can be held to be invalid merely because the notice contained some amount towards interest and cost separately after indicating the amount covered by the cheque which stood bounced. This question has already been answered by this Court in the case of Suman Sethi v. Ajay Churiwal (2000 (1) SCALE 385 : 2000 AIR SCW 383). https://hcservices.ecourts.gov.in/hcservices/ 4. Mr.Ganguli, learned senior counsel appearing for the accused contended that the aforesaid judgment requires reconsideration in view of the strict compliance of the provisions of Section 138 of the Negotiable Instruments Act. 5. Having examined the notice that was given in the present case and the provisions of the Act as well as the law laid down by this Court, we see no force in the aforesaid contention and, therefore, in our view the Magistrate was wholly in error to hold that the notice itself is invalid. We, therefore, set aside the impugned order of the High Court and that of the Magistrate and direct the Magistrate to conclude the proceedings in accordance with law, as expeditiously as possible. 6. This appeal stands allowed accordingly." 22. From the above decisions, it is clear that the decision of the Supreme Court reported in AIR 2000 SC 828 = 2000 (2) SCC 380 (Suman Sethi Vs. Ajay K.Churiwal), was relied upon by the Supreme Court in both the later judgments reported in 2001 AIR SCW 2352(2) = 2001 (10) SCC 763 (United Credit Ltd., Calcutta Vs. Agro Sales India and others) and also in 2003 (4) CTC 252 = 2003 (8) SCC 300 (K.R.Indira Vs. Dr.G.Adinarayana). 23. As extracted above the observations of the Supreme Court, in the decision reported in 2003 (4) CTC 252 = 2003 (8) SCC 300 (cited supra), the Supreme Court held that, " .. .. Though no formal notice is prescribed in the provision, the statutory provision indicates in unmistakable terms as to what should be clearly indicated in the notice and what manner of demand it should make. .... ..... In a given case, if consolidated notice is found to provide sufficient information envisaged by the statutory provision and there was a specific demand for the payment of the sum covered by the cheque dishonoured, mere fact that it was a consolidated notice, and/or that further demands in addition to the statutorily envisaged demand was also found to have been made may not invalidate the same. ...." It was further held in the said decision by the Supreme Court, that, " ... .... Significantly, not only the cheque amounts were different from the alleged loan amounts but the demand was made not of the cheque amounts but only the loan amount as though it is a demand for the loan amount and not the demand for payment of the cheque amount; nor could it be said that it was a demand for payment of the cheque amount and in addition thereto made further demands as well. What is necessary is making of a demand for the amount covered by the bounced cheque which is conspicuously absent in the notice issued in this case. The notice in question is imperfect in this case not because it had any further or additional claims as well but it did not specifically contain any demand for the payment of the cheque amount, the non-compliance with such a demand only being the https://hcservices.ecourts.gov.in/hcservices/ incriminating circumstance which expose the drawer for being proceeded against under Section 138 of the Act. ...." 24. While considering the above decisions of the Supreme Court, along with Ex.P-13 notice, in the earlier paragraphs of Ex.P-13, the dates and the amounts of the cheques, have been given and in the subsequent paragraph, time has been specified and there is a specific wording for claim of amount and the prosecution for non-compliance, has been clearly mentioned. In paragraph 13 of Ex.P-13 notice, it is stated as follows: "13. Take Notice therefore, that unless you discharge the entire debt of Rs.13,85,920/- (Rs. Thirteen lakh eighty-five thousand nine hundred and twenty) by sending a Banker's Cheque or Demand Draft to my client, together with further interest till the date of actual payment, within FIFTEEN DAYS from now. Prosecution will be straightaway launched against you, both under Sec.138 of Negotiable Instruments Act and Sec.420 of Indian Penal Code." 25. Hence, I am of the view that while considering the contents of Ex.P-13, that notice is valid under Section 138 of the N.I. Act. 26. Next question to be decided is as to whether at the time of issuance of Exs.P-7 and P-8, there is any existing or subsisting legal liability. 27. Learned counsel for the appellant-complainant would submit that the documents Exs.P-3 to 6 and P-9 have clearly proved that Exs.P-7 ad P-8 were given only for discharge of the loan obtained by the respondent-accused under Ex.C-1 promissory note. Ex.P-3 is the Telegu version, dated 27.9.1997, which was written and signed by the respondent-accused in his own handwriting, in favour of the appellant-complainant, and the English translation of Ex.P-3, is marked as Ex.P-4. Ex.P-4 it is stated by the respondent-accused, as follows: "I gave you two Cheques towards your loan. (1) 30.9.97 Cheque No.746780 for Rs.6,60,000/-. (2) 31.10.97 Cheque No.746779 for Rs.5,80,000/-. Money has not reached me as expected. The moneys that I must get will reach on 10.11.97. Therefore, kindly present the above two Cheques in Bank on 11.11.97." 28. Next letter is Ex.P-5 (Telugu version), dated 29.10.1997, written by the respondent-accused to the appellant-complainant and https://hcservices.ecourts.gov.in/hcservices/ the English translation of the same is marked as Ex.P-6, in which it is stated as follows: "I spoke with you in detail over the phone on 25.10.97. Afterwards, since the present money market has deteriorated, and because of Deepavali festival, the money that I must get may be delayed by two or three weeks, and I may not get on 10.11.97 as I had originally expected. Therefore, as I told you already, I am sending you interest of Rs.49,600/- upto 31.12.97 (from 1.11.97 to 31.12.97), calculating at 24%, by Cheque No.746783 dt.31.12.97 on Syndicate Bank. Therefore, the three Cheques listed below which I had given you, be presented in Bank on 31.12.97:- (1) Syndicate Bank, Cheque 746780 for Rs.6,60,000/- dt.30.9.97, (2) Syndicate Bank, Cheque No.746779 for Rs.5,80,000/- dt.31.10.97, (3) Syndicate Bank, Cheque No.746783 for Rs.49,600/- dt.31.12.97.