IN THE HIGH COURT OF JUDICATURE ANDHRA PRADESH AT HYDERABAD FRIDAY THE TWENTYSIXTH DAY OF AUGUST TWO THOUSAND AND ELEVEN PRESENT THE HONOURABLE SRI JUSTICE R. KANTHA RAO CRIMINAL APPEAL NOs. 855 & 856 OF 2006 Between: CRL.A.No. 855 of 2006 Smt. Kanchana Mani Kumari … Appellant V/s. Sri Thota Venkatramaiah & Anr. … Respondents Counsel for the Appellant : Sri CB.Ram Mohan Reddy Counsel for the Respondent No.1 : Sri K.Chidambaram Counsel for the Respondent No.2 : Addl.Public Prosecutor Between: Kanchana Venkatakrishna Bhagwan … Appellant V/s. The State of Andhra Pradesh Represented by its Public Prosecutor High Court of Andhra Pradesh Hyderabad & 2-Ors. … Respondents Counsel for the Appellant : Sri CB Ram Mohan Reddy Counsel for the Respondent No.1 : Addl.Public Prosecutor Counsel for the Respondents 2 & 3 : Sri K.Chidambaram The Court made the following : (Common Judgment follows next page). THE HONOURABLE SRI JUSTICE R. KANTHA RAO CRIMINAL APPEAL NO. 855 OF 2006 CRIMINAL APPEAL NO. 856 OF 2006 COMMON JUDGMENT : Criminal Appeal No. 855 of 2006 arises out of the Judgment dated 16-5-2006 passed by the Special Judicial Magistrate of First Class (Excise), West Godavari at Eluru in CC.No. 503 of 2005. 2. Criminal Appeal No. 856 of 2006 arises out of the Judgment dated 16-5-2006 passed by the Special Judicial Magistrate of First Class, (Excise), West Godavari at Eluru in CC.No. 67 of 2005. 3. CC.No. 503 of 2005 arose out of a complaint filed by Smt. Kanchana Mani Kumari under section 138 of the Negotiable Instruments Act against Thota Venkatramaiah. Whereas CC.No. 67 of 2005 arose out of a complaint filed by Kanchana Venkatakrishna Bhagvan under section 138 of the Negotiable Instruments Act against Thota Venkataramaiah and Thota Naga Jhansi Lakshmi Bai. The complainants in both the cases are husband and wife. So also the accused 1 and 2 in CC.No.67 of 2005 are husband and wife. 4. The brief facts giving rise to the filing of the present criminal appeals are stated as follows : On 15-1-2002 the accused in CC.No. 67 of 2005 have jointly borrowed an amount of Rs.20,000/- + Rs.20,000/- (total Rs.40,000/-) from the complainants in both the cases for their family expenses agreeing to repay the said amount with interest @ 24% per annum, jointly executed two promissory notes in favour of the complainants separately on the said date. In spite of the repeated demands, they did not pay the amount to the complainants (appellants) and ultimately towards discharge of the debt under the suit promissory notes the respondent (accused in CC.No. 503 of 2005) issued a cheque for an amount of Rs.40,000/- on 22-11-2004 drawn on ICICI Bank Limited Powarpet, Eluru towards full and final settlement of the amount due under the promissory note. Whereas both the accused in CC.No. 67 of 2005 jointly issued a cheque for an amount of Rs.30,000/- on 25-11-2003 drawn on Baroda Bank, Eluru towards discharge of the debt under the promissory note jointly executed by them. The cheque issued by Thota Venkataramaiah, the respondent-accused in Crl.A.No. 855 of 2006 when presented for collection on 23-11-2004 was dishonoured on the ground of “Insufficient funds”. Whereas the cheque jointly issued by the respondents in Crl.A.No.856 of 2006, the respondents (Accused 1 and 2) when presented for collection on 01-12-2003 was dishonoured on the ground of “insufficient funds”. After receiving information about the dishonour, the appellants issued notice to the respondents on 03-12-2004. They received the notices on 09-12-2003 and 03-12-2004 respectively. The notice issued on 09-12-2003 was received by the accused on 17-12-2003 whereas the notice issued on 03-12-2004 was received by the accused on 21-12-2004. But the accused-respondents did not pay the cheque amount nor did they give any reply to the notice issued by the appellants. Thereafter, the complainants-appellants filed the complaints, which are mentioned above. 5. In CC.No. 503 of 2005 the complainant in support of her case examined PWs 1 to 3 and marked Exs.P1 to P6. The respondent-accused examined himself as DW-1 and marked Exs.D-1 to D-4. 6. In CC.No. 67 of 2005 the complainant in support of her case examined her husband Kanchana Venkatakrishna Bhagvan as PW-1 and another witness as PW-2 and marked Exs.P-1 to P-5. The first accused was examined as DW-1 and marked Exs.D-1 to D-3. 7. In both the cases, the learned trial Court upon considering the entire evidence on record acquitted the respondents-accused of the offence under section 138 of the Negotiable Instruments Act. 8. The acquittal was recorded by the learned trial Court on the following grounds: The promissory notes filed by the appellants-complainants in each case contain the signature of the attestor whereas the xerox copies of the promissory note filed by the accused in each case do not contain the signatures of the attestors. Therefore, the defence version of the respondents-accused is that blank promissory notes and blank cheques were obtained by the appellants from the respondents can be presumed and the accused could be able to rebut the presumption which is in favour of the complainant under section 139 of the Negotiable Instruments Act, and therefore, the complainants failed to prove that cheques were issued by the respondents towards discharge of any legally enforceable debt. The trial Court calculated the amount allegedly due under the promissory note with interest and having found that the cheques were issued for more amount than which was due by the accused on the date of issuance of cheques. The learned trial Court came to the conclusion that the blank cheques were obtained from the respondents-accused and subsequently they were filled up by the complainants. It is on the above said two grounds, the orders of acquittal were recorded by the learned trial Court. 9. Now the point for determination is that whether there are any valid grounds to set aside the orders of acquittal passed by the learned trial Court ? 10. The respondents-accused have not denied their signatures on Ex.P1 cheque and Ex.P2 promissory note in each case. They also did not totally deny the factum of borrowing the amount from the appellants. Their version is that they borrowed an amount of Rs.10,000/- + Rs.10,000/- and agreed to repay the same together with interest but the appellants obtained from them blank promissory notes and blank cheques separately and filed false cases against them. There is a presumption under section 118 of the Negotiable Instruments Act that until the contrary is proved, it shall be presumed that every negotiable instrument is made or drawn for consideration. Similarly, Section 139 of the Negotiable Instruments Act dealing with presumption in favour of the holder, lays down that unless the contrary is proved, the holder of a cheque received it in discharge of debt or other liability. Therefore, there is a presumption in favour of the appellants (complainants) that the promissory notes were supported by consideration and that the cheques were issued by the respondents-accused for discharge of legally enforceable debt under the promissory notes. The learned trial Court also held in its Judgment that there is a presumption in favour of the complainants as mentioned above to hold that the respondents-accused could be able to rebut the presumption by bringing on record the xerox copy of the promissory note which contain the signatures of the attestors and also demonstrating before the trial Court that the cheques were issued for more than the amount due under promissory notes as on the date of issuance of cheque. 11. Now it is required to be seen that whether the conclusions arrived at by the trial Court are correct ? 12. The promissory note is not a compulsorily testable document. Therefore, even if it is considered that on the promissory note containing signatures of the executants (respondents) the appellants obtained the signatures of the attestors subsequently, it cannot be said that the promissory note itself is void. The promissory note can be proved by the appellants despite the fact that the promissory notes filed by them contain signatures of the attestors and whereas the xerox copies of the promissory notes filed by the respondents-accused which are marked as Ex.D-1 in each case do not contain the signatures of the attestors. The liability arising under section 138 of the Negotiable Instruments is quite different from the civil liability. The criminal liability under section 138 of the Negotiable Instruments Act arises when a cheque was issued in discharge of any legally enforceable debt or other liability and if subsequently it was dishonoured. Therefore, it is enough on the part of the complainants to establish that the cheques were issued in discharge of legally enforceable debt and subsequently it was dishonoured. As already said in the present case, even if it is considered that the signatures on Ex.P-1 promissory notes in each case were obtained subsequently by the appellants, it is not possible to hold that the said promissory notes are void. Since the promissory note is not compulsorily attestable document, still the appellants can prove that the promissory note was executed in their favour and it is a matter to be decided by the civil court in which the suits are pending either to decree or dismiss the suit but in so far as the criminal liability under section 138 of the Negotiable Instruments Act is concerned it arises irrespective of the fact that whether the appellants will be able to establish their case before the civil court or not. Even without filing the suit they can maintain prosecution under section 138 of the Negotiable Instruments Act and the scope of enquiry by the criminal court in relation to an offence under section 138 of the Negotiable Instruments Act is limited to the provisions contained under the Negotiable Instruments Act and it has nothing to do with the question whether the signatures of the attestors on the promissory notes were obtained subsequently or not. So long as , the promissory notes produced by the appellants are not void abnitio or not legally they can maintain prosecution under section 138 of the Negotiable Instruments Act. Therefore, the trial Court, in my considered view is the learned trial court erred in holding that the respondents could be able to rebut the presumption which arose in favour of the appellants under section 118 of the Negotiable Instruments Act and under section 139 of the Negotiable Instruments Act. The view expressed by the trial Court that it is for the appellants to explain as to why the respondents subscribed signatures on the promissory note is also contrary to law. Since the respondents admitted their signatures on the promissory notes, the burden is on them to explain as to why they subscribed the signatures on the promissory notes. In the instant case, except the testimony of DW-1 in each case, there is no material to show the circumstances under which they subscribed the signatures on the promissory notes. 13. The respondents are not totally denying about the borrowing of any amount from the appellants. They only stated that they borrowed lesser amount but not the amount mentioned under the promissory notes. Under these circumstances, it cannot be said that the respondents are able to rebut the presumption under section 118 of the Negotiable Instruments Act which is in favour of the complainants. As regards, the other question that is issuance of cheques for the amount more than which was due under the promissory notes, it may be stated that the respondents, who admitted their signatures on the respective cheques have to explain as to why they gave the blank cheques to the appellants. There is no proper explanation from the respondents. It is not always necessary that cheque has to be issued by the respondents for the actual amount due under the promissory note. In the instant case the amounts under the cheques were approximately for the amount due under the promissory note and may not be for sot the exact amount. Therefore, on that score the learned trial Court ought not to have doubted the issuance of the cheques and held that the cheques were not issued towards discharge of the legally enforceable debt. Therefore, the findings of the learned trial Court on this aspect are contrary to the evidence on record and are liable to be set aside. 14. For the foregoing reasons, the order of acquittal passed by the learned trial Court against the accused-respondents (respondent No.1 in CC.No.503 of 2006 and also the accused Nos. 1 and 2 in CC.No. 67 of 2005) (respondents 1 and 2 in Criminal Appeal No. 856 of 2006 is set aside. The accused-respondents in each case is sentenced to undergo Simple Imprisonment for a period of six months and to pay a fine of Rs.5,000/- each. In default, to undergo simple imprisonment for one month. 15. In the result, both the criminal appeals are allowed. _______________________ JUSTICE R. KANTHA RAO. 26-08-2011 I s L. THE HONOURABLE SRI JUSTICE R. KANTHA RAO CRIMINAL APPEAL No. 855 AND 856 OF 2006 COMMON JUDGMENT CIRCULATION No. 08 Date: 26-08-2011 Court Master : I s L Computer No. 43