IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 30.04.2009 Coram THE HONOURABLE MR. JUSTICE S.TAMILVANAN Crl.A.No.993 of 1999 1. K.Deivasagayam (Deceased) 2. D.Kirubanayagam 3. D.S.Jamesnayagam 4. D.Inbanayagam 5. D.Selvanayagam 6. D.Jeevanayagam 7. A.Santhoshrani 8. B.Bala Bhaskar 9. Hemachona ..Appellants (Appellants 2 to 9 were brought on record as per the order of this Court, dated 25.03.2009.) vs. 1. St. Joseph Charity Trust Kolathur, Chennai – 99 2. Jayaseelan Naga Kesari ..Respondents PRAYER : Appeal filed under Section 378 Cr.P.C, against the order, dated 07.05.1999 made in C.A.No.74 of 1999 on the file of the III Additional Sessions Judge, Chennai, reversing the order of conviction of the respondents by order, dated 02.04.1998 made in C.C.No.1188 of 1993 on the file of the XVII Metropolitan Magistrate, Saidapet, Chennai For Appellants : Mrs.G.Thilagavathi For Respondents : Mr.R.C.Paul Kanagaraj J U D G M E N T This Criminal Appeal has been preferred against the Judgment, dated 07.05.1999 passed in C.A.No.74 of 1999 on the file of the III Additional Sessions Judge, Chennai, reversing the Judgment, dated 02.04.1998 passed in C.C.No.1188 of 1993 on the file of the XVII Metropolitan Magistrate, Saidapet, Chennai whereby the respondents / accused were convicted by the trial court. The appellants 2 to 9 in https://hcservices.ecourts.gov.in/hcservices/ the criminal appeal are the legal representatives of the deceased appellant, who was the complainant before the trial court. 2. After the trial, considering the evidence available on record and the arguments advanced by both sides, the trial court found that the respondents / accused were guilty under Section 138 of Negotiable Instruments Act, accordingly, convicted the second respondent herein and sentenced him to undergo 3 months 10 days simple imprisonment. The first respondent was also convicted and sentenced and directed to pay Rs.1,50,000/- towards the cheque amount as compensation to the complainant. 3. On appeal, the aforesaid Judgement was reversed by the court below, whereby the respondents herein were acquitted. Aggrieved by which, criminal appeal has been preferred by the deceased complainant. After his demise, his legal representatives were added as appellants 2 to 9. 4. It is an admitted fact that the cheques were given pursuant to the sale agreement entered into between the respondents herein and the deceased complainant. It is not in dispute that an advance amount of Rs.50,000/- was paid by way of cheque, that was encashed by the complainant. However, the other two cheques for a total sum of Rs.1,50,000/- issued for balance of sale consideration were dishonoured, due to which, the complaint was filed under Section 138 of Negotiable Instruments Act. 5. It is not in dispute that the sale deed was not executed by the complainant, pursuant to the agreement. Mr.R.C.Paul Kanakaraj, learned counsel appearing for the respondents submitted that the petitioners herein have not performed their part of the contract and therefore, as held by the appellant court, the complainant has not established that the cheque was issued for an amount that was legally due and payable by the respondents herein to the complainant or the appellants. As the cheques were issued towards the performance of the contract by one party namely, the respondents herein, without performing their part of the contract by executing the sale deed, neither the complainant nor the appellants can claim the balance of sale consideration from the respondents. Further, when a civil case is pending with regard to the said agreement for sale between the parties, without performing their part of performance under the contract, the appellants cannot have legal right to claim the cheque amount. 6. In the complaint itself, the original complainant, deceased K.Deivasagayam has specifically stated that the first respondent, church represented by the second respondent, had given three cheques to the complainant as advance for the purchase of house site. The first cheque, dated 14.07.1992 for a sum of Rs.50,000/- drawn on https://hcservices.ecourts.gov.in/hcservices/ Indian Overseas Bank, the second and third cheques, dated 22.07.1992 for a sum of Rs.50,000/- and Rs.1,00,000/- respectively drawn on Indian Overseas Bank. The first cheque, dated 14.07.1992 was presented for payment and the amount was realised, only the other two cheques were dishonoured due to insufficient funds. Subsequently, legal notice was issued to both the respondents, directing them to pay the amounts, as per the cheques, that were dishonoured due to insufficient funds. As the cheque amounts were not paid by the respondents, the complainant filed the complaint under Sections 138 and 142 of Negotiable Instruments Act. 7. In the impugned judgment passed by the court below, it was held that pursuant to the agreement for sale, there was a dispute between both the parties and a civil dispute is pending. 8. Learned counsel, Mr.R.C.Paul Kanagaraj, appearing for the respondents submitted that there was no intention of cheating on the part of the respondents herein. It is not in dispute that neither the complainant, nor his legal representatives have executed the sale deed, as per the agreement for sale of immovable property, hence, they are not entitled to the cheque amounts. 9. In a case under Section 138 r/w 142 of Negotiable Instruments Act, there should be a case made out that the cheque was issued for the amount due and payable to the complainant. In other words, the cheques could have been issued towards any amount due and payable, as per law. 10. It is a settled proposition of law that when there is a dishonour of cheque, both civil and criminal remedies are available to the affected person, namely, the payee of the cheque, if it was issued for a legally enforceable debt. 11. In Bhagwan Lal vs. State of Rajasthan reported in 1999 (2) Bank CLR 434, Rajasthan High Court has held that when a civil suit is pending, wherein the subject matter is the cheque relating to the criminal case, then filing of complaint based on the disputed cheque is not proper, since one can avail only one remedy at a time and not both. 12. It is a settled proposition of law that there should be legal liability to pay the cheque amount, otherwise, the drawer of the cheque is not liable for criminal action under Section 138 of Negotiable Instruments Act. If the issuance of cheque is established, the burden is upon drawer of the cheque, that it was not supported by consideration. 13. Under Section 118 of the Negotiable Instruments Act, it is made clear that every negotiable instrument was made or drawn for https://hcservices.ecourts.gov.in/hcservices/ consideration and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration, until the contray is proved. As contemplated under Section 118 of the Negotiable Instruments Act, 1881, it is a rebuttable presumption. 14. In the instant case, it is not in dispute that there was an agreement for sale relating to an immovable property between the complainant and the respondents herein. Towards payment of the sale consideration, three cheques were issued by the respondents herein, out of which, one cheque for Rs.50,000/- was honoured and the amount was realised, the other two cheques for a total value of Rs.1,50,000/- were admittedly dishonoured by the bank. However, the complainant or his legal representatives have not executed the sale deed. In such circumstances, the respondents are not bound to make any payment, as the cheques were issued only for the balance of sale consideration, payable towards the agreement for sale. It is an admitted fact that civil dispute is also pending between the appellants and the respondents, with regard to the agreement for sale. Therefore, I am of the view that the presumption under Section 118 of the Negotiable Instruments Act, which is rebuttable in nature is in favour of the respondents herein, based on the aforesaid fact. 15. Had the sale deed been executed in favour of the respondents, it could be the cheque issued for a legally enforceable debt. In the instant case, admittedly the sale deed has not been executed by the complainant or the appellants herein in favour of the respondents and therefore, on the date of filing of the suit, consideration was not passed on the respondents. The dishonoured cheques were not supported by consideration. The civil suit is pending, which is directly related to the cheque amount, that was issued towards sale consideration and therefore, the issue has to be decided only by the Civil Court. Hence, it is clear that the cheques were not issued for a legally enforceable debt, since the sale deed, not being executed by the appellants. 16. On the above facts and circumstances, I am of the view that there is no error on the part of the court below, in reversing the Judgment rendered by the trial court and recording acquittal of the second respondent. Hence, the criminal appeal is liable to be dismissed. 17. In the result, this criminal appeal is dismissed. Sd/ Asst.Registrar /true copy/ tsvn Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To 1. The III Additional Sessions Judge Chennai. 2. The XVII Metropolitan Magistrate, Saidapet, Chennai. 3. The Public Prosecutor High Court, Madras. + 1 c.c. to Mrs. G. Thilakavathy, Advocate. S.R.No.19813. Judgment in Crl.A.No.993 of 1999 MRD (CO) GSK 02.06.2009. https://hcservices.ecourts.gov.in/hcservices/