HON’BLE SRI JUSTICE G.V.SEETHAPATHY CRL.A.NO.246 OF 2005 DATED: 13.08.2009 BETWEEN: K.SATYANAND .. Appellant And R.Ramagopal Rao and another .. Respondents HON’BLE SRI JUSTICE G.V.SEETHAPATHY CRL.A.NO.246 OF 2005 JUDGMENT: This appeal is directed against the judgment dated 10.11.2004 in C.C.No.49 of 2003, on the file of the Special Judicial Magistrate of First Class for PCR Cases at Warangal, wherein the complaint filed by the appellant herein against the 1st respondent/accused alleging offence punishable under Section 138 of the Negotiable Instruments Act (for short ‘the Act’), was dismissed. 2. Heard learned counsel for the appellant/complainant and the learned counsel for the 1st respondent/accused. Perused the records. 3. According to the appellant, the complainant, 1st respondent/accused approached him for loan and the complainant arranged loan of Rs.2,00,000/- on 10.07.1999 and Rs.3,00,000/- on 28.08.1999 and the accused executed two promissory notes in favour of the complainant and after several demands, the accused in discharge of his legally enforceable liability issued a cheque bearing No.492664, dated 16.2.2002 for the total principal amount of Rs.5,00,000/-. It is alleged that when the complainant presented the cheque for encashment through Syndicate Bank, Hanmakonda, it was returned unpaid on 22.2.2002 stating that the account was closed. On 28.02.2002, the complainant got issued a registered notice to the accused demanding payment of the said cheque amount. The accused duly received the said notice and got issued a reply dated 30.03.2002 with false allegations. The accused pleaded not guilty. 4. In support of his case, the complainant examined himself as PW.1 and two other witnesses as PWs.2 and 3 and got marked Exs.P.1 to P.10. The accused himself examined as DW1. Apart from himself, he examined DW2 and marked Exs.D.1 and D.2. 5. The trial Court framed the following points for consideration: i) Whether the accused issued cheque Ex.P.1 towards discharge of legally enforceable debt as alleged by the complainant? ii) Whether the cheque Ex.P.1 was presented for collection in the bank concerned and returned on the ground of closure of account of accused as alleged by the complainant? ii) Whether the complainant proved beyond reasonable doubt the guilt of the accused for the offence punishable under Section 138 of Negotiable Instruments Act? 6. On a consideration of the evidence available on record, the learned Magistrate held on Point No.1 that the complainant failed to prove that the accused issued Ex.P.1 cheque towards discharge of legally enforceable debt. On point No.2, the trial Court held that the complainant presented the cheque Ex.P.1 for encashment and the same was returned on the ground ‘account closed’. On point No.3, it was held that in view of the finding on point No.1, the accused was not liable for punishment under Section 138 of the Act. Accordingly, the accused was found not guilty and was acquitted thereof. Aggrieved by the said order of acquittal, the present appeal is filed. 7. The accused admitted the execution of the promissory notes–Exs.P.6 and P.7 and also issuance of cheque–Ex.P.1. But, according to the accused, it was not issued on the date mentioned in the cheque or for the consideration mentioned therein and he gave only a blank cheque along with two other cheques as security for the debt advanced by DW.1 to PW.1. According to the accused, PW.1 approached him to stand as guarantee for the loan of Rs.1,50,000/- obtained by him from DW1 and on account of friendship and believing the words of PW.1, the accused gave three blank cheques including Ex.P.1–cheque in July, 1996 to DW.1 as collateral security and DW.1 also issued similar cheques and pronotes to PW1. PW.1 failed to repay the debt due to DW1 and on pressure from DW1, the accused paid Rs.75,000/- towards the said debt which was, in fact, due by PW.1 and PW.1 failed to pay the balance amount. It is further pleaded by the accused that PW.1 issued a cheque for the balance amount to DW.1 and DW.1 presented the same for encashment, but it was dishonoured and later DW1 filed a complaint under Section 138 of the Act against PW.1 and the matter ended in compromise and at that time PW1 took return of the blank documents from DW1, but did not further return the same to the accused and taking advantage of his custody of the blank cheques including Ex.P.1-cheque containing the signature of the accused, PW1 foisted the present complaint. It is further pleaded by the accused that at the time of taking return of the documents from DW1, PW1 passed a receipt Ex.D.2 also. Thus, according to the accused, he stood only as a guarantor for the repayment of the loan taken by PW.1 from DW1 and even after the transaction between PW.1 and DW1 ended in a compromise. PW.1 though obtained return of the documents including Ex.P.1 cheque from DW1, failed to handover the said cheque to the accused, though, in fact, the accused paid a sum of Rs.75,000/- to DW1 on behalf of PW.1 on account of friendship and confidence. It is not as though the accused had taken the said plea for the first time by way of defence in the present transaction. Even in the reply notice Ex.P.8 issued by him to the notice–Ex.P.3 issued by PW.1, the accused had specifically pleaded as above. 8. The burden, therefore, necessarily lies on the accused to prove that the cheque–Ex.P.1 was not issued in discharge of any legally enforceable liability by him to PW.1. It is open to the accused to discharge the said burden by adducing evidence and also by taking advantage of the admissions made by PW.1 in the cross-examination. 9. PW.1 admitted that he borrowed a sum of Rs.1,00,000/- from DW1 in 1996. Thus, admittedly, PW.1 was indebted to DW1 in a sum of more than Rs.1,00,000/-. PW.1 also admitted that the cheque issued by him to DW.1 was bounced and DW1 filed a case against him in the year 1999 and the said matter ended in compromise. It is significant to note that PW1 was indebted to DW1 to an extent of more than Rs.1,00,000/- at about the same time, when according to him the accused borrowed huge amounts of Rs.2,00,000/- and Rs.3,00,000/- from him. If really PW.1 had the capacity to lend such huge amounts of Rs.2,00,000/- and Rs.3,00,000/- to the accused and if PW.1 was having the said amount available with him, there is absolutely no reason as to why PW1 has not chosen to discharge the debt due by him to DW.1 which was only around Rs.1,00,000/- and avoid the criminal consequences. If really PW.1 was having such a huge amount of Rs.5,00,000/- with him to lend to the accused, he would not have, in the natural course of human conduct, issued a cheque to DW1 that would get bounced, entailing penal consequences. The very fact that PW.1 could not repay the debt due by him in a sum of Rs.4,00,000/- to DW1 and even the cheque issued by him got bounced, would negate his claim that he was having capacity to lend huge amount of Rs.5,00,000/- to the accused at about the same time. DW.1 fully corroborated the plea of the accused in all respects. Nothing is elicited in the cross-examination of DW1 as to why he should align himself with DW2 and as against PW1 and resort to giving any false evidence against PW1. The testimony of DW1 coupled with the compromise memo Ex.B.1 and the receipt Ex.B.2 given by PW.1 to DW1 acknowledging receipt of the documents from DW1 strengthens the case of the accused. PW.1 went to the extent of denying that he issued a cheque for Rs.1,00,000/- on 19.04.1999 to DW1, but the same is referred to in the notice Ex.P.10 issued on behalf of PW1 and also proved by DW.1. 10. Though PW.1 denied passing of receipt Ex.D.2, his admission that he entered into a compromise with DW1, coupled with the evidence of DW1, probabilises the version of the accused that under Ex.D.2, PW.1 had taken return of the documents including Ex.P.1 cheque from DW1. 11. According to PW.1, he arranged loan of Rs.2,00,000/- and Rs.3,00,000/- to the accused by borrowing amounts from his friends in a sum of Rs.50,000/- from each of them and he named them as M.Subash Chandra, M.S.Chandra, J.Prasad, U.Srinivas, Raj Mohammed and B.Srinivas. The fact that PW.1 had to borrow amounts from so many people for the sake of arranging loan to the accused, would disprove his claim that he was having capacity to lend the money. Further, there is nothing on record to show that PW.1 borrowed any such amounts from his friends for the sake of lending to the accused. On the other hand, one of his friends U.Srinivas, examined as PW.2, deposed that Raj Mohammed is said to have borrowed Rs.10,000/ from P.W.1. When a person had borrowed a sum of Rs.10,000/- from PW1, it is not believable that the said person would have lent a sum of Rs.50,000/- to PW.1. 12. Admittedly, PW1 and DW1 were classmates and friends since long time. But still PW.1 says that he does not know whether the accused is financially well off and had no need to borrow any amount from PW.1. As rightly observed by the trial Court, PW.1 does not appear to be speaking the whole truth. In view of the undiscredited testimony of DW1, who is the common friend of PW1 and the accused, it is clear that the cheque Ex.P.1 was given by the accused only by way of security for the loan incurred by PW.1 from DW1 and in spite of the said transaction between DW1 and PW.1 ending in compromise and resulting in acquittal of PW.1, PW.1 has not chosen to return the cheque to the accused when he received it back from DW1 and, on the other hand, filed the present complaint. The evidence, oral and documentary, on record, coupled with admissions of PW1, clearly go to show that PW.1 had no capacity to lend such amount of Rs.5,00,000/- to the accused. The accused had duly discharged the burden of showing that the cheque Ex.P.1 was not issued by him in discharge of any legally enforceable debt and that it was given by him only as a security for the loan due by PW.1. 13. In the circumstances, on reappraisal of the evidence on record, it is held that the impugned judgment of the trial Court acquitting the accused does not call for any interference in this appeal. 14. The criminal appeal is accordingly dismissed. ______________________ G.V.SEETHAPATHY,J Dated: 13.08.2009 kvrm