IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 31.03.2010 CORAM: THE HONOURABLE MS.JUSTICE R.MALA Crl.A.Nos.325 of 2003 and 148 of 2006 Shukla Dutta Roy, rep. by Power of Agent Biplab Dutta Roy .. Appellant/Complainant in Crl.A.No.325 of 2003 Biplab Dutta Roy .. Appellant/Complainant in Crl.A.No.148 of 2006 Vs. V.Mohamed Hussain .. Respondent/Accused in both the Criminal Appeals Criminal Appeal No.325 of 2003 against the judgment dated 13.11.2002 in C.C.No.3726 of 2001 on the file of IInd Metropolitan Magistrate's Court, Egmore, Chennai. Criminal Appeal No.148 of 2006 against the judgment dated 5.1.2006 in C.C.No.3727 of 2001 on the file of IInd Metropolitan Magistrate's Court, Egmore, Chennai. For appellants : Mr.Aravind Dattar, Senior Counsel for Mr.M.Rajendran For respondent : Mr.Shanmugavelayutham, Senior Counsel for Mr.V.Manoharan JUDGMENT The Criminal Appeals have been filed by the complainants against the judgments of acquittal, dated 13.11.2002 and 5.1.2006 in C.C.Nos.3726 and 3727 of 2001 respectively, on the file of the IInd Metropolitan Magistrate's Court, Egmore, Chennai, whereby, the respondent-accused was acquitted of the charge under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the N.I. Act'). https://hcservices.ecourts.gov.in/hcservices/ 2. The appellants have filed the complaints under Section 138 of the N.I. Act against the respondent-accused. The case of the complainants, which is common in both the cases, is as follows: The appellants-complainants in both the cases are husband and wife. The appellants-complainants entered into a memorandum of agreement with the brother-in-law of the respondent-accused, on 9.12.1996 in respect of construction of a house and a supplementary agreement also came into existence. Since there was defect in service, the appellants-complainants have filed O.P.No.32 of 1998 before the State Consumer Disputes Redressal Commission, Chennai, wherein, a joint memo was filed on 24.11.1998 and in pursuance of the same, order was passed on the same day. Since the terms specified in the joint memo were not complied with, the Execution Petition was filed by the appellants-complainants. In the said E.P., Mohammed Yaseen, the brother-in-law of the respondent-accused, was sentenced to undergo rigorous imprisonment for two years. Against that, Mohammed Yaseen preferred a Civil Revision Petition in C.R.P.No.3429 of 2000, before this Court and also a petition for bail. In the said Civil Revision Petition, a compromise was entered and Mohammed Yaseen offered to give Rs.14,50,000/- in full and final settlement. In pursuance of the same, memorandum of agreement was entered on 4.12.2000, and Rs.1,50,000/- was paid by way of Demand Draft and receipt has been issued and for payment of Rs.13 lakhs, two post- dated cheques each, dated 5.2.2001, for Rs.6,50,000/-, were issued, one in the name of the appellant in Crl.A.No.325 of 2003 and another, in the name of the appellant in Crl.A.No.148 of 2006. When the cheques were presented, they were returned with return memo by the Bank and a debit advice was also received from the Bank. Notice had been issued by the appellants-complainants on the respondent-accused and the acknowledgement was also received by the respondent-accused. The respondent-accused neither paid the amount, nor sent a reply. Hence, the appellants have filed two separate complaints. 3. After following the formalities, the trial Court questioned the respondent-accused, and he pleaded not guilty. During the course of trial, in Crl.A.No.325 of 2003 pertaining to C.C.No.3726 of 2001, P.Ws.1 to 3 and D.Ws.1 to 3 were examined and Exs.P-1 to P-14 were marked; during the course of trial, in Crl.A.No.148 of 2006 pertaining to C.C.No.3727 of 2001), P.W.1 and D.Ws.1 and 2 were examined and Exs.P-1 to P-14 and Ex.D-1 were marked. On the basis of the oral and documentary evidence, the trial Court dismissed the complaints and the respondent-accused was acquitted of the charge, as indicated above. 4. Challenging the judgments of acquittal, learned Senior Counsel appearing for the appellants-complainants would contend that the trial Court dismissed the complaints stating that there is no https://hcservices.ecourts.gov.in/hcservices/ subsisting liability on the date of issuance of the cheques and in pursuance of the memorandum of agreement entered on 4.12.2000, the respondent-accused issued two cheques, each for Rs.6,50,000/-, in favour of the respective appellants-complainants. As per Sections 118 and 139 of the Negotiable Instruments Act, the presumption is to be drawn. Learned Senior Counsel appearing for the appellants- complainants relied upon the decision of the Supreme Court reported in 2002 (6) SCC 426 (ICDS Ltd. Vs. Beena Shabeer) and submitted that the cheques were issued in respect of guarantee and if the cheques were bounced, it is an offence under Section 138 of the N.I. Act. Learned Senior Counsel for the appellants-complainants also relied upon the decision of the Supreme Court reported in 2001 (6) SCC 16 (Hiten P.Dalal Vs. Bratindranath Banerjee) for "presumption" under Sections 118 and 139 of the Negotiable Instruments Act. He further submitted that the trial Court has not considered the same. The 'presumption' is in favour of the appellants-complainants. Even though the respondent-accused pleaded 'presumption', the trial Court has come to the conclusion that the amounts have been deposited, but for the discharge, the respondent-accused has not filed any document, for payment of Rs.13 lakhs in cash. There is no reason as to why the respondent-accused has not taken back the cheques. The respondent- accused has not given any notice to the Bank for 'stop payment' and he has not given any invoice to the complaints for return of the cheques and after the cheques have been bounced, the appellants- complainants issued notice on 14.3.2001, but no reply has been issued by the respondent-accused. Furthermore, the respondent-accused filed a petition under Section 309 Cr.P.C. for adjournment and in that, he has stated that he wanted the adjournment to settle the entire amount in the last week of May 2002. So, these facts clearly prove that the cheques for Rs.13 lakhs (Rs.6,50,000/- each) have not been discharged and the trial Court has not considered this aspect in proper perspective. Hence, he prayed for allowing the Criminal Appeals. 5. Per contra, learned Senior Counsel appearing for the respondent-accused would lay his hand only on one issue, stating that the cheques have been issued and after the issuance of the cheques, the amounts have been discharged. Learned Senior Counsel appearing for the respondent-accused relied upon an affidavit filed in C.R.P.3429 of 2000 and he culled out the evidence of P.W.1 and D.W.1. He further submitted that as per the evidence of D.Ws.1, 2 and 3, the amounts have been paid in the office of Mr.Venkatavaradhan, Advocate, who was the counsel for the complainants, but he stated that non- examination of Mr.Venkatavaradhan, Advocate, is fatal to the case. Learned Senior Counsel for the respondent-accused also relied upon the decision reported in 2008 (1) SCC 258 (K.Prakashan Vs. P.K.Surenderan) in support of his contentions. He further submitted that there is no infirmity or illegality in the impugned judgments of acquittal and prayed for dismissal of the Criminal Appeals. https://hcservices.ecourts.gov.in/hcservices/ 6. The admitted facts which are relevant for the disposal of the appeals are as follows: The appellant in Crl.A.No.325 of 2003 is the wife of the appellant in Crl.A.No.148 of 2006. She executed a Power of Attorney Deed in favour of her husband. The memorandum of agreement and supplementary agreement, dated 9.12.1996, were executed. In pursuance of the same, the respondent herein has not complied with the terms of agreement and hence, the appellants-complainants were forced to file a petition before the State Consumer Disputes Redressal Forum. On 24.11.1998, they compromised the matter and a joint memo was filed. That has been marked as Exs.P-3 and 4, respectively in the cases before the trial Court. In pursuance of Exs.P-3 and P-4, the order was passed as per Exs.P-4 and P-5 respectively. Mohammed Yaseen, the brother-in-law of the respondent-accused, has not complied with the order of the Court and hence, E.P. had been filed and the order passed in E.P.Nos.22 and 33 of 1999 in O.P.No.32 of 1998, has been marked as Exs.P-5 and P-6 respectively, in which, it was ordered that Mohammed Yaseen has to pay Rs.11,20,000/- with interest @ 24% with effect from 9.12.1996 and Rs.3 lakhs as damages for loss and mental agony suffered. Since the agreement has not been complied with, the appellants-complainants filed petition before the State Consumer Disputes Redressal Forum, in which, Mohammed Yaseen was sentenced to two years' rigorous imprisonment on 17.1.2000 for non-compliance of the order in O.P.No.32 of 1998. Immediately, the said Mohammed Yaseen preferred a C.R.P.No.3429 of 2000 and the affidavit in the said C.R.P. has been marked as Ex.P-7 in respect of Crl.A.No.148 of 2006. During the pendency of C.R.P.No.3429 of 2000, the present accused-Mohammed Hussain, on behalf of his brother-in-law Mohammed Yaseen, approached the appellants-complainants for settlement and a settlement has also been reached. Rs.14,50,000/- has been accepted for full and final settlement of all claims of Mohammed Yaseen and accordingly, on 4.12.2000, a memorandum of agreement was entered into between the parties as per Exs.P-6 and P-7 respectively. In the said memorandum of agreement, dated 4.12.2000, the following clauses are stated: "NOW THIS AGREEMENT WITNESSES AS FOLLOWS: a) The parties of the second part has this day paid a sum of Rs.1,50,000/- Rupees One lakh and Fifty Thousand only by way of Demand Draft dt:13/11/2000 drawn on UCO Bank, Service Branch, Chennai, towards part compensation, the receipt of which sum is acknowledged by the parties of the first part. b) The parties of the second part hereby agrees and undertakes to pay the balance sum of Rs.13,00,000 (Rupees thirteen lakhs) which includes balance compensation of Rs.1,50,000 (Rupees one Lac. fifty thousand only) within a period of two months from this day and have for this purpose https://hcservices.ecourts.gov.in/hcservices/ given two post dated cheques in favour of the parties of the first part, the details of which are as follows: i) Cheque No.554716 dt: 5/2/2001 in favour of Mrs.Shukla Dutta Roy drawn on Canara Bank, Vepery Branch, for an amount of Rs.6,50,000 (Rupees Six Lakhs and Fifty Thousand Only); ii) Cheque No.554718 dt: 5/2/2001 in favour of Mr.Biplab Dutta Roy drawn on Canara Bank, Vepery Branch, for an amount of Rs.6,50,000 (Rupees Six Lakhs and Fifty Thousand Only); c) The parties of the second part hereby assures and affirms to the parties of the first part that they will honour the cheques without any default. Further the counsel for the parties of the second part Mr.P.Rajamanickam, also undertakes to ensure and help in the payment of the entire balance of Rs.13,00,000 by the parties of the second part, in token of which he has signed this agreement as a witness. d) In the event of any default in honouring the two post dated cheques, the parties of the second part agree that they are liable for any criminal prosecution that may be initiated by the parties of the first part for the said purpose; e) The parties of the first part agreed to file an affidavit before the Hon'ble High Court, Madras, in C.R.P.No.3429/2000 to the effect that the dues by Mr.Yaseen has been fully settled in O.P.No.32/1998." On the basis of the said memorandum of agreement, dated 4.12.2000, as per Ex.P-7 in Crl.A.No.148 of 2006, an affidavit has been filed by the complainants, which shows that admittedly, on 4.12.2000, the disputed two cheques, each for Rs.6,50,000/-, have been issued in the name of the appellants-complainants. 7. At this juncture, it is appropriate to consider the decision relied upon by the learned Senior Counsel appearing for the appellants-complainants, reported in 2002 (6) SCC 426 (ICDS Ltd. Vs. Beena Shabeer), in which, the Supreme Court held as follows: "8. The High Court, as noticed above, did allow the petition upon a categorical finding that being a cheque from the guarantor it could not be said to have been issued for the purpose of discharging any debt or liability and the complaint under Section 138 of the Negotiable Instruments Act, 1881, thus cannot be maintained." "10. The language, however, has been rather specific as regards the intent of the legislature. The commencement of the section stands with the words "Where any cheque". The abovenoted three words are of extreme significance, in https://hcservices.ecourts.gov.in/hcservices/ particular, by reason of the user of the word "any"---the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment." "11. The issue as regards the coextensive liability of the guarantor and the principal debtor, in our view, is totally out of the purview of Section 138 of the Act, neither the same calls for any discussion therein. The language of the statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of Section 138 of the Act. "Any cheque" and "other liability" are the two key expressions which stand as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the statute. Any contra-interpretation would defeat the intent of the legislature. The High Court, it seems, got carried away by the issue of guarantee and guarantor's liability and thus has overlooked the true intent and purport of Section 138 of the Act. The judgments recorded in the order of the High Court do not have any relevance in the contextual facts and the same thus do not lend any assistance to the contentions raised by the respondents." 8. It is true that Ex.P-8 cheques, in both the cases, have been issued only to discharge the liability of Mohammed Yaseen, the brother-in-law of the respondent-accused. As per the said decision reported in 2002 (6) SCC 426 (cited supra), if a cheques is issued in discharge of any debt or other liability, there cannot be any restriction or embargo in the matter of application of the provision of Section 138 of the N.I. Act and "Any Cheque" and "other liability" are the two key expressions which stand as clarifying the Legislative intent so as to bring the factual context within the ambit of the provisions of the statute. While applying the said decision of the Supreme Court to the facts of the present cases, I am of the view that Ex.P-8 cheques, in both the cases, were issued for the discharge of subsisting liability on the date of issuance on 4.12.2000. https://hcservices.ecourts.gov.in/hcservices/ Furthermore, the learned Senior Counsel for the respondent (accused) counsel has not quarrelled over the proposition laid down in the said decision and he has also not advanced any argument in respect of the fact that on the date of issuance of Ex.P-8 cheques in both the cases, there is no subsisting liability. Hence, I am of the view that Ex.P-8 cheques were issued only for the discharge of liability of Mohammed Yaseen, the brother-in-law of the respondent-accused. 9. Learned Senior Counsel appearing for the respondent-accused would mainly focus upon the documents marked in the respective cases, namely, the memorandum of agreement entered on 4.12.2000 and the affidavit of the appellants-complainants, sworn to on 4.12.2000 in C.R.P.No.3429 of 2000. 10. Admittedly, the said affidavit of the appellants-complainants in C.R.P.No.3429 of 2000, was filed on 6.12.2000. The case of the respondent-accused is that on 4.12.2000, the parties entered into a memorandum of agreement dated 4.12.2000 and cheques have been issued. But the Advocate for the complainants has intimated that cash has to be paid and so, on 5.12.2000, cash of Rs.13 lakhs had been paid in the office of Mr.Venkatavaradhan, Advocate for the complainants by D.W.1 Tippu Sultan and D.W.3 Mohammed Hussain, to P.W.1 B.D.Roy and his wife, in the presence of the Advocate Rajamanickam D.W.2. Only in pursuance of the same, Ex.P-7 affidavit, dated 4.12.2000, in C.R.P.No.3429 of 2000, had been filed before the trial Court in C.C.No.3727 of 2001, in which it is stated as follows: "1. We submit that the amounts due under the order dt.24/11/1998 passed by the State Consumer Disputes Redressal Commission, Chennai in O.P.No.32 of 1998 has been fully received by us from Mr.V.Mohammed Hussain and Mr.A.Tippu, the brother-in-law and the brother respectively of the petitioner Mr.Mohammed Yaseen. The order of the State Consumer Disputes Redressal Commission has been fully complied." 11. Further, the learned Senior Counsel appearing for the respondent-accused culled out the portion from the English translation of the evidence of the witnesses, which is filed in the typed set of papers along with the Criminal Appeals and the relevant portion of the same are extracted hereunder: (a) P.W.1 B.D.Roy, in C.C.No.3726 of 2001, has stated in his cross examination as follows: " ... I have filed an affidavit duly signed by me before the Madras High Court stating that since Mohamed Yasin has paid me the entire amount, the case before the Consumer Forum was withdrawn. This affidavit was sworn only on the agreement entered into between us. I have not filed any case against Mohamed Yasin. ...." https://hcservices.ecourts.gov.in/hcservices/ (b) D.W.1 A.Thippu Sulthan in C.C.NO.3726 of 2001, has stated as follows in his chief examination: " .... We have filed an application before the High Court for granting bail to Mohamed Yasin. However, the High Court has not accepted the above settlement. On the next day, we have entered into full settlement and consequently, the case against Mohamed Yasin was withdrawn and his imprisonment was cancelled. We have given cash towards full settlement. However, no receipt was issued for the amounts received by B.D.Roy and also he did not return back the cheque." (c) D.W.2 Rajamanickam, in C.C.No.3726 of 2001, in his chief examination, has stated as follows : " ... On 5.12.2000 at 5 P.M., myself, petitioner's relative and the accused went to the house of the petitioner's advocate R.Venkatavaradan. R.Venkatavaradan had called the petitioner over phone. The petitioner along with his wife came there. Mohamed Yasin had given Rs.13 lakhs to the petitioner and his wife in the presence of the accused, myself and R.Venkatavaradan. I had asked the petitioner to return the agreement and the cheques, for which, he informed that the same are in his house. ...." 12. Learned Senior Counsel appearing for the respondent-accused submitted that the amount has been paid to the appellants and so, the respondent-accused has proved that the amount has been discharged. To substantiate the same, he relied upon the decision of the Supreme Court, reported in 2008 (1) SCC 258 (K.Prakashan Vs. P.K.Surenderan), in which, the Supreme Court observed as follows: "13. The Act raises two presumptions: firstly, in regard to the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability. Presumptions both under Sections 118(a) and 139 are rebuttable in nature. Having regard to the definition of terms "proved" and "disproved" as contained in Section 3 of the Evidence Act as also the nature of the said burden upon the prosecution vis-a-vis an accused it is not necessary that the accused must step into the witness box to discharge the burden of proof in terms of the aforementioned provision. 14. It is furthermore not in doubt or dispute that whereas the standard of proof so far as the prosecution is concerned is proof of guilt beyond all reasonable doubt; the one on the accused is only mere preponderance of probability." https://hcservices.ecourts.gov.in/hcservices/ 13. Relying on the said decision reported in 2008 (1) SCC 258 (cited supra), learned Senior Counsel appearing for the respondent- accused submitted that the respondent-accused has proved that the liability had been discharged, and as held by the Supreme Court, it is not in doubt or dispute that the standard of proof so far as the prosecution is concerned, is, proof of guilt beyond all reasonable doubt and that, of the accused, it is only mere preponderance of probability. Hence, as per the evidence, it is proved that the amount has been discharged on 5.12.2000 and furthermore, the name of the Advocate of the complainants, namely Mr.Venkatavaradhan is indicated in the evidence of D.W.2 Rajamanickam, because, only in the presence of the said Mr.Venkatavaradhan, in his house, the amount had been paid, and the said Mr.Venkatavaradhan was not examined before Court, which is fatal to the case. The trial Court has considered these aspects and hence, learned Senior Counsel appearing for the respondent-accused prayed for dismissal of the Criminal Appeals. 14. It is true that the prosecution has to prove the case beyond all reasonable doubt and the accused has to prove his case by way of defence, by mere preponderance of probability. In the present cases, as per the evidence, it is contended that the respondent-accused proved his case. 15. At this juncture, it is appropriate to consider each and every document. Admittedly, in the respective cases, Exs.P-6/P-7 memorandum of agreement, had been admitted by both sides and it was executed on 4.12.2000. As already incorporated in the earlier paragraph of this judgment, the clauses to the said memorandum of agreement, dated 4.12.2000, it was stated therein that the cheques have been given. The only defence is whether on 5.12.2000, the amount of Rs.13 lakhs had been paid. 16. It would now be appropriate on the part of the Court to answer the question raised by the learned Senior Counsel for the appellants-complainants that the respondent-accused paid Rs.1,50,000/- by way of Demand Draft and obtained receipt. But, the contention that when the respondent-accused paid Rs.13 lakhs by way of cash, he has not received any receipt for the reception of the amount, is unacceptable one. 17. It is true that admittedly, there was a strained relationship between the appellants and Mohammed Yaseen, the brother-in-law of the respondent-accused and the said Mohammed Yaseen was housed at jail for non-compliance of the order passed by the State Consumer Disputes Redressal Forum. At that time only, the said Mohammed Yaseen preferred Civil Revision Petition before this Court, in which, the parties wanted to settle and they wanted Mohammed Yaseen, the brother-in-law of the accused to be released from jail; they https://hcservices.ecourts.gov.in/hcservices/ mobilised funds and the appellants-complainants received only Rs.1,50,000/- by way of Demand Draft. On payment of amount by way of Demand Draft, it is stated that the respondent-accused received the receipt. But there is no evidence to show that for the payment of Rs.13 lakhs in cash, as to how they mobilised the same. But, it is not necessary. 18. As already stated, as per the dictum of the Apex Court in the decision reported in 2008 (1) SCC 258 (cited supra), in respect of criminal jurisdiction, the prosecution alone has to prove the guilt of the accused beyond reasonable doubt and the accused need not prove his case beyond reasonable doubt and the standard of proof in respect of the accused is only mere preponderance of probability, which is enough. 19. In the present case, the respondent-accused stated that he paid Rs.13 lakhs by way of cash, to the appellants-complainants, for which, no receipt was issued by the appellants-complainants. This Court has to consider whether the statement of defence taken by the respondent-accused is acceptable one. 20. The circumstances for disbelieving the payment of Rs.13 lakhs,