HON’BLE SRI JUSTICE N. RAVI SHANKAR CRIMINAL REVISION CASE No.74 of 2010 ORDER:- Petitioner in this revision is the de facto complainant in the calendar case C.C.No.33/2007 on the file of the Court of VII Additional Chief Metropolitan Magistrate, Hyderabad (trial Court). The first respondent herein (herein afterwards, referred to as ‘accused’), was tried on a charge under Section 420 IPC (cheating and dishonestly inducing delivery of property). The substance of the charge is that the accused induced the de facto complainant to lend him a sum of Rs.5,60,000/- by issuing a cheque for the said amount on his closed bank account which was dishonoured for that reason and thereby cheated the de facto complainant as he had no intention from the beginning to repay the amount. 2. The trial Court after considering the prosecution evidence and the defence of the second respondent has by its judgment dated 23.07.2009 found him guilty of the said charge and convicted him accordingly and sentenced him to undergo one year rigorous imprisonment and also a fine of Rs.2,000/- with default clause prison sentence of six months. On appeal i.e. Crl.A.No.238 of 2009 by the accused, the Court of V Additional Metropolitan Sessions Judge-cum- XXI Additional Chief Judge at Hyderabad (appellate Court), by its judgment dated 17-12-2009 acquitted the accused. 3. Before the points raised in this revision are taken up the circumstances which led to the filing of this revision should be noted. Initially the de facto complainant filed a private complaint before the concerned Metropolitan Magistrate’s Court at Hyderabad and that was referred to Jubilee Hills Police Station by the said Court for investigation and report. The said police after completion of investigation filed charge sheet against the accused alleging against him an offence punishable under Section 420 IPC. The State did not file any revision against the acquittal recorded by the appellate Court but the de facto complainant himself came up with this revision. 4. The substance of the prosecution case against the accused is this. There is acquaintance between the de facto complainant and the accused. Out of that acquaintance the accused borrowed a sum of Rs.5,60,000/- in the first week of March 2003 and gave Ex.P2 post dated cheque with the date 01.09.2003 for the above amount of Rs.5,60,000/- on a representation that the de facto complainant can encash the same towards discharge of the loan. Ex.P2 which is a certified copy of the cheque shows that the Bank of the accused is Andhra Bank, Nampally branch, Hyderabad. The de facto complainant’s bank is Andhra Bank, Kalyan Nagar branch. It is stated that the de facto complainant presented the above cheque in his Bank for encashment on 24.11.2003. Ex.P3 certified copy of the return memo given by the de facto complainant’s Bank would show that the cheque was returned unpaid by the accused’s Bank on the ground that the accused has already closed his account in January 2003. The exact date of closure of the account is not found in the judgments of the trial court and the appellate court but this month January 2003 is found in the evidence of P.W3 Jagadeeswar Reddy, the then Manager of the Andhra Bank, Nampally branch, Hyderabad. This is not in dispute. The prosecution version is that by first week of March 2003 the account of the accused in his aforesaid Bank already stood closed and since the accused gave the Ex.P2 cheque in first week of March 2003 on his account which stood closed nearly two months prior to the date of its issue i.e. the date of taking the loan, the accused must be held to have cheated the de facto complainant and therefore he is guilty of the offence under Section 420 IPC. It is alleged that since the accused made the de facto complainant to lend him to give the loan by issuing the above cheque in question, he must be held to have induced him to part with the amount on Ex.P-2 cheque which could not have been encashed in the above circumstances and therefore he must be held to have an intention to cheat the de facto complainant and cheated him. 5. The trial court as well as the appellate court on evidence held that the prosecution has established its case on facts that the accused borrowed the sum of Rs.5,60,000/- in the first week of March 2003 from the de facto complainant and on the date of borrowal itself he also gave Ex.P2 cheque on his bank account which was already closed in January 2003 i.e. nearly two months before the date on which the cheque was given. On the said facts the trial Court held that since the accused gave the cheque in question on his account which was closed two months prior to the date on which it was given that amounts to cheating and convicted the accused under Section 420 IPC. The appellate Court again dealt with these aspects on the above facts and recorded acquittal. It had recorded its reasons for giving acquittal in paras 13, 14 and 15 of its judgment. 6. The de facto complainant who argued the matter as party- in-person pointed out that the reasoning given by the appellate Court for recording acquittal is illegal on the face of it and therefore, this Court should interfere in the matter and restore the judgment of the trial Court. He invited my attention to the reasons given by the appellate Court and further pointed out that having accepted that the whole prosecution case as established on facts, it committed a grave irregularity or a manifest error of law by drawing wrong inferences and therefore the acquittal should be set aside and the trial Court judgment which is correct should be restored. 7. On the other hand, the learned counsel for the accused pointed out that the power of this Court under Section 397 Cr.P.C. i.e. which deals with revisions is controlled by Section 401 Cr.P.C. which regulates the exercise of the revisional powers of this Court and he further argued that this Court cannot reappreciate the evidence and come to a different conclusion. It may also be noted Section 401 (3) Cr.P.C. says that a High Court cannot in a revision convert a finding of acquittal into conviction and therefore this Court cannot restore the judgment of the trial Court in this revision. He further pointed out that the judgment of the appellate Court does not suffer from any illegality or infirmity and that is also a ground to dismiss this revision. Lastly, he submitted that if this Court finds that the impugned judgment of the appellate Court is contrary to law, this Court can at best remand the matter to the appellate Court for a fresh disposal of the appeal. 8. In this connection, it should be noted that in Thankappan Nadar Vs. Gopals Krishnan[1] the Supreme Court laid down the limitations on the revisional power of this Court after interpreting Section 397 and Section 401 Cr.P.C. That was a case where an Assistant Sessions Judge convicted the accused for offences under Sections 143, 147, 148 and 307 read with Section 149 IPC. On appeal by accused, the Sessions Judge concerned after reappreciating the evidence acquitted them. The High Court in the revision of the de facto complainant set aside the acquittal granted by the District Judge and remitted the matter back to the trial Court by reappreciating the evidence. The Supreme Court held that the scope of the revisional power of the High Court is very limited and it can interfere with an acquittal only when it is vitiated by a manifest error of law or a procedural irregularity and it cannot set aside the acquittal merely because a view different from the one taken by the appellate Court is possible. The previous case law laid down by the Supreme Court on this point which lays down the same principle has also been reiterated. Laying down this proposition or principle, the Supreme Court found that the High Court without finding any procedural irregularity or manifest error of law in the order of the Sessions Judge, merely reappreciated the evidence and remanded the matter and that was not permissible. Basing on this proposition, it has now to be seen whether the impugned judgment of the appellate Court suffers from any illegality or manifest error of law to interfere with it as contended by the de facto complainant and if so, what relief should be granted in this revision. It has already been stated supra that the appellate Court has given its reasons for acquittal in paras 13, 14 and 15 of its judgment. The said paras read as follows: “13. The case of the prosecution is that the accused requested for a loan of six lakh rupees, that PW.1 lent Rs.5,60,000/- and that the accused passed the post dated cheque under the original of Ex.P.2. No antecedent transaction was mentioned as the cause for issuance of Ex.P.2. It is not the case of the prosecution that Ex.P.2 was issued by the accused as a security to the loan obtained by him or for any other purpose or on the demand of PW.1. As such, Ex.P.2 cannot be linked to the transaction of borrowing the amount by the accused from PW.1. Admittedly PW.1 obtained a money decree against the accused in a civil suit OS.401/2006. Ex.P.6 and Ex.P.7 are the judgment and decree in the said civil suit. The case of the plaintiff (PW.1) in that suit is the same in this case. The transaction of loan between PW.1 and the accused is purely a civil transaction. A civil remedy lies for it. PW.1 pursued the said civil remedy also. The dishonour of cheques is dealt with by Sec.138 of Negotiable Instruments Act now. As such, it is doubtful whether the prosecution can file a charge under Sec.420 I.P.C. Whether the ingredients of cheating were established in the present case is the next point for consideration of this court. 14. For the issuance of the cheque by the accused in favour of PW.1, there appears no deception. As already stated, the cheque was not issued by the accused as a security to the loan obtained by him from PW.1. PW.1 did not part with any property or he did not deliver any property to the accused on the representation of the accused. It is not the case of the prosecution that the accused represented that the cheque will be a security to the transaction of loan. Likewise there is no evidence with regard to fraudulent or dishonest inducement on part of the accused. The parties were known to each other from a long time prior to the alleged date of transaction 6.3.2003. the case of the prosecution is that PW.1 obliged the request of the accused to lend some amount. Therefore the prosecution did not establish deception by the accused, as well as, fraudulent and dishonest inducement by the accused. PW.1 did not part with any property after the handover of the impugned cheque. PW.1 did not commit any act or omit to commit any act after the issuance of cheque. The issuance of cheque did not result in causing damage or harm to the person, body, mind, reputation or property of PW.1. Hence the ingredients of the offence of cheating were not established in this case. The only adverse circumstance against the accused is that he closed the account in Andhra Bank, Nampally, by the date of issuing the cheque under Ex.P.2. However, the said circumstance alone will not establish the other ingredients of the offence. 15. In the light of the above finding, I am of the view that the trial court erred in convicting and sentencing the accused for the offence under section 420 I.P.C. Further the offence under section 420 I.P.C is not attracted when a separate law is provided to deal with the situation. The dishonour of cheque is punishable under section 138 of Negotiable Instruments Act. The same is not punishable under section 420 IPC, under the present circumstances of the case. It appears that the transaction between the parties is more of civil nature. At any rate, the prosecution failed to establish the ingredients of the offence of cheating. The case law relied on by the prosecution is not relevant for the circumstances of the case. I hold that the prosecution failed to prove the offence. The accused is accordingly acquitted of the offence under section 420 I.P.C. The conviction and sentence passed by the trial court are set aside. The point is held accordingly.” 9. The first reason given by the appellate Court is that as the de facto complainant admittedly obtained a money decree against the accused in the suit O.S.No.401/2006 on the foot of the cheque in question and as the case pleaded in the said suit and the present criminal case are same the transaction between the de facto complainant and the accused must be held to be purely a civil transaction and consequently criminal prosecution is not maintainable. The filing of the suit in O.S.No.401 of 2006 by the de facto complainant and obtaining of a money decree by him against the accused for the sum of Rs.5,60,000/- are admitted. The second reason given by it is that as the dishonour of a cheque is an offence under section 138 of the Negotiable Instruments Act, 1881 (for short – the Act) it is doubtful whether a criminal case can be filed for the offence under section 420 IPC indicating that the complainant for the dishonour of a cheque issued to him should pursue only the prosecution for the offence under section 138 of the Act and not for Section 420 IPC. The third reason then given by the appellate court is that the evidence shows that the de facto complainant did not part with money on the cheque in question given by the accused or that the accused did not give the cheque as a security and therefore the ingredients of the offence of cheating as defined by section 417 IPC or the ingredients of section 420 IPC are lacking. It then proceeded to observe that the accused gave the cheque after closing his bank account and though this is an adverse circumstance against him that by itself cannot be held to establish the ingredients of cheating in the circumstances of this case. A perusal of the appellate Court Judgment would show that the above three reasons weighed with it in reversing the judgment of the trial Court. 10. In my opinion, as contended by the revision petitioner i.e. the de facto complainant who argued the matter in person, the above reasons given by the appellate court cannot be sustained as they are clearly against the law or the legal position. So far as the first reason is concerned, it may be noted that a suit will lie for recovery of money basing on a dishonoured cheque and therefore the mere filing of the suit by the de facto complainant cannot be a ground by itself to hold that the dispute is of a civil nature. It is now well settled that on the same set of facts a suit may lie for recovery of money and that cause of action can also give rise to a criminal prosecution. Hence the first reason given by the appellate court cannot be sustained as it is contrary to the settled legal position. 11. Then coming to the second reason given by the appellate court, it may be noted that a full bench of this court in M/S.OPTS MARKETING PVT. LTD. vs STATE OF A.P.[2] held that even after introduction of section 138 in the Act still a prosecution for an offence of cheating punishable under Section 420 IPC can be maintained if the necessary ingredients of that offence are attracted to a given case. It therefore follows that the finding of the appellate court that since there is section 138 of the Act the maintainability of a prosecution by the payee of the dishonoured cheque for an offence under Section 120 IPC is doubtful or cannot be maintained cannot also be said to be correct as it is contrary to the above legal position. It appears that the above decision was not taken to the notice of the appellate Court and hence, it committed a serious error in giving the above second reaons. Hence this second reason of the appellate court cannot also be sustained. 12. Then turning to the third reason given by the appellate court it held that the accused did not give the cheque as a security or otherwise and induce the de facto complainant to part with the amount. The reason recorded by the appellate court is that there was acquaintance between the parties and the loan transaction was effected out of that acquaintance. It may be noted that normally a loan transaction will be effected or will take place between two individuals who are acquainted with each other. In the present case it is the specific version of the de facto complainant that on the date on which he gave the amount in question to the accused the latter gave the post dated cheque in question for the amount of loan informing him that he can encash the same and it was only on that basis he lent the amount. The trial court considered this aspect and concluded that the very act of giving a post dated cheque on an account which was closed two months prior to the date of issuing cheque would amount to cheating and fraudulent or dishonest intention can be inferred as the cheque was issued on a closed account and because of that a further inference can also be drawn that the accused had no intention to repay the amount because of the closure of his account right from the beginning i.e. the date of issuance of the cheque on which he borrowed the amount. The appellate court reversed the above conclusion of the trial court without recording any reasons for disagreeing with the trial court’s conclusion. 13. It may be noted that in D.Atchyutha Reddy vs. State of Andhra Pradesh[3] (relied upon by the de facto complainant) it has been held by this court that issuance of a cheque given in discharge of a loan amount on a closed account amounts to cheating and this is stated in so many words in para- 23 of the said judgment. It appears that this legal position has also not been taken to the notice of the appellate court though the appellate court’s judgment is dated 17.12.2009 and the above judgment of this court is dated 30.10.2009. In fact, the above mentioned decision of this Court is stated to be between the same parties in connection with another cheque and loan transaction. Thus it can be said for the aforesaid reasons that the grounds given by the appellate Court for recording of an acquittal are contrary to law or legal position and that it can be said to have committed a manifest illegality or error of law in ordering acquittal and this is a ground for setting aside the judgment under appeal in view of the legal position laid down in Thankappan Nadar’s case referred to supra. 14. The question now is whether this Court in this revision can restore the judgment of the trial Court. In view of the legal position stated in Thankappan Nadar’s case itself, it follows that this Court can at best in the circumstances of this case remand the matter back to the appellate Court but not the trial Court as the trial Court already recorded conviction basing on the legal position in D.Atchyutareddy’s case (3rd referred to supra). Accordingly, for the reasons aforesaid, the judgment of the appellate Court is set aside and the matter is remanded back to the appellate Court for fresh disposal in accordance with law. It is made clear that the legal position pointed out now by this Court need not be understood by the appellate Court as directing it to confirm the conviction recorded by the trial Court. The appellate Court may keeping in view the said legal position appraise the evidence and decide afresh about the merits of the matter regarding the guilt or innocence of the accused as the whole matter is at large before it now. 15. Parting with the matter, the learned counsel for the accused also pointed out that the plea of the accused that de facto complainant also participated in the business of the accused and that in fact the de facto complainant has no capacity to lend the amount and even otherwise the de facto complainant is carrying on money lending business without having any money lending licence in Hyderabad as required by the AP Telangana Area Money Lenders Act and therefore he cannot recover the amount by reason of the said Act and consequently the present prosecution is not maintainable. He further argued that the above pleas have not been considered by the appellate Court. He also relied upon a decision of this Court given in Maripalli Mahirathnam Gupta vs. Stat of A.P.[4] and contended that basing upon the proposition laid down in that judgment the mere issuance of a cheque on a closed bank account cannot amount to cheating. It may be noted that for the reasons aforesaid, it has been decided to send the appeal back to the appellate Court for fresh disposal. In view of the same, it shall be open for the accused to raise all the above pleas before the appellate Court. ______________________ N. RAVI SHANKAR, J 21st June 2011 CVRK [1] 2002 S.C.C. (9) 393 [2] 2001 Crl.LJ 1489 [3] 2010 (1) ALD (CRL.) 59 (AP) [4] 2000 (2) ALT (Crl.) 395 (D.B.) (A.P.)