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CHEQUE BOUNS CASE

“Cheque is guarantee or security for repayment Use of word ‘guarantee’ in complaint does not convey that cheque was not issued for due discharge of legally enforceable debt/liability

IN THE HIGH COURT OF JUDICATUREAT MADRAS

Cheque sample for a fictional bank in Canada. ...

Cheque sample for a fictional bank in Canada. May also apply for the United States. Created by Sergio Ortega based on real cheque standards. Note: U.S. checks are the same except for the MICR format, which is slightly different, and the issue date which is not OCR-ready as it is in Canada. Some U.S. checks also still have a “fractional routing number” near the date; this was used in hand-sorting checks prior to MICR. (Photo credit: Wikipedia)

DATED: 29.04.2011
CORAM
THE HONOURABLE MS. JUSTICE R. MALA
Crl.R.C.Nos.93 to 96 of 2006

A.Sakthivel .. Petitioner/Accused
in all Crl.R.Cs.

..Vs..

K.R.Navaneetha Krishnan .. Respondent/Complainant
in all Crl.R.Cs.

Prayer:The Criminal Revisions are filed under Sections 397 read with 401 Cr.P.C., praying against the judgment dated 19.01.2006 made in C.A.Nos.399 to 402 of 2004, on the file of VI Additional Sessions Judge, Chennai, confirming the judgment of conviction dated 31.05.2004 made in C.C.Nos.650 of 2000 and 4384, 4386 and 5635 of 1999 on the file of XVIII Metropolitan Magistrate Court, Saidapet, Chennai and to set aside the same.
For Petitioner : Mr.V.Madhavan
For Respondent : Mr.A.Thiagarajan
C O M M O N O R D E R
The criminal revisions arise out of the judgment of conviction and sentence, dated 19.01.2006, in C.A.Nos.399 to 402 of 2004, passed by the learned VI Additional Sessions Judge, Chennai, whereby the accused was convicted for the offence under Section 138 of Negotiable Instruments Act and sentenced to undergo simple imprisonment for six months and to pay a compensation of Rs.3,50,000/-, Rs.2,00,000/-, Rs.2,50,000/- and Rs.2,00,000/- (in all the four cases) to the respondent/complainant within three months, in default, to undergo three months’ simple imprisonment, confirming the judgment of conviction and sentence dated 31.05.2004 in C.C.Nos.650 of 2000 and 4384, 4386 and 5635 of 1999 passed by the learned XVIII Metropolitan Magistrate, Saidapet, Chennai.

2.The brief facts of the case in Crl.R.C.No.93 of 2006:
The petitioner/accused borrowed money from the respondent/complainant and in respect of the same, he issued Exs.P1 to P3 promissory notes and issued Exs.P4 to P6 three cheques bearing Nos.079329, 079330 and 079331 for Rs.1,00,000/-, Rs.1,00,000/- and Rs.1,50,000/-, dated 23.09.1998, 24.09.1998 and 25.09.1998 respectively, for discharging legally enforceable debt. When the cheques were presented in the Bank for encashment under Exs.P7 to P9 challans, they returned as “insufficient funds” and the return memo was marked as Ex.P10 and debit advice was marked as Ex.P11. After that, the respondent/complainant herein has issued a statutory notice to the petitioner/accused under Ex.P12 and an acknowledgment card was marked as Ex.P13. After receipt of the said notice, the petitioner/accused neither repaid the amount nor sent any reply. Hence, the respondent/complainant preferred a complaint against the petitioner/accused under Section 138 of Negotiable Instruments Act.

3.The brief facts of the case in Crl.R.C.No.94 of 2006:
The petitioner/accused borrowed money from the respondent/complainant and in respect of the same, he issued Exs.P1 and P2 two cheques bearing Nos.125677 and 125678 for Rs.1,00,000/- and Rs.1,00,000/-, dated 30.10.1998 and 31.10.1998 respectively, for discharging legally enforceable debt. When the cheques were presented in the Bank for encashment, they returned as “insufficient funds” and the return memo was marked as Ex.P3 and debit advice was marked as Ex.P4. After that, the respondent/complainant herein has issued a statutory notice to the petitioner/accused under Ex.P5 and an acknowledgment card was marked as Ex.P6. After receipt of the said notice, the petitioner/accused neither repaid the amount nor sent any reply. Hence, the respondent/complainant preferred a complaint against the petitioner/accused under Section 138 of Negotiable Instruments Act.

4.The brief facts of the case in Crl.R.C.No.95 of 2006:
The petitioner/accused borrowed money from the respondent/complainant and in respect of the same, he issued Exs.P1 and P2 promissory notes and issued Exs.P3 and P4 two cheques bearing Nos.079400 and 125676 for Rs.1,50,000/- and Rs.1,00,000/-, dated 28.10.1998 and 29.10.1998 respectively, for discharging legally enforceable debt. When the cheques were presented in the Bank for encashment under Ex.P5 challan, they returned as “insufficient funds” and the return memo was marked as Ex.P6 and debit advice was marked as Ex.P7. After that, the respondent/complainant herein has issued a statutory notice to the petitioner/accused under Ex.P8 and an acknowledgment card was marked as Ex.P9. After receipt of the said notice, the petitioner/accused sent a reply notice under Ex.P10, but he has not repaid the cheque amounts. Hence, the respondent/complainant preferred a complaint against the petitioner/accused under Section 138 of Negotiable Instruments Act.

5.The brief facts of the case in Crl.R.C.No.96 of 2006:
The petitioner/accused borrowed money from the respondent/complainant and in respect of the same, he issued Exs.P1 and P2 promissory notes and issued Exs.P3 and P4 two cheques bearing Nos.079327 and 079328 for Rs.1,00,000/- and Rs.1,00,000/-, dated 21.09.1998 and 22.09.1998 respectively, for discharging legally enforceable debt. When the cheques were presented in the Bank for encashment under Exs.P5 and P6 challans, they returned as “insufficient funds” and the return memo was marked as Ex.P7 and debit advice was marked as Ex.P8. After that, the respondent/complainant herein has issued a statutory notice to the petitioner/accused under Ex.P9, but the cover was returned and the same was marked as Ex.P10. Since the petitioner/accused has not repaid the cheque amounts, the respondent/complainant preferred a complaint against him under Section 138 of Negotiable Instruments Act.
6.The trial Court, after furnishing copies to the accused, since he pleaded not guilty, examined the witnesses P.W.1 to P.W.3 and perused the documentary evidence under Exs.P1 to P15, P1 to P9, P1 to 12, P1 to P12 and Exs.D1 and D2, D1 to D6, D1 to D5 and D1 to D5 in all the four cases, convicted the accused for the offence under Section 138 of Negotiable Instruments Act and sentenced him as indicated above, against which, the accused preferred an appeal in C.A.Nos.399 to 402/2004. The learned VI Additional Sessions Judge, after hearing the arguments of both sides counsel, confirmed the judgment of conviction and sentence passed by the trial Court, against which, the petitioner/accused has come forward with the revisions.

7.Challenging the said conviction and sentence, the learned counsel for the petitioner/accused submitted that both the Courts below have not considered that the respective cheques were issued for money borrowed by the partnership firm namely, M/S.M.V.K. Silk Sarees for its business purpose. The petitioner/accused has no personal liability to pay the amounts and he is not an authorised signatory of that account. When the case of the respondent/complainant is that the amounts were borrowed by the firm for its business purpose, then the initial burden is cast upon the respondent to prove that the cheques were issued by the accused in discharging of legally enforceable liability of the partnership firm. Only when the initial burden is discharged by the complainant, the presumption under Section 139 of Negotiable Instruments Act can be made use against the accused. He further submitted that both the Courts below have failed to point out that no statutory notice was issued to the firm. Hence, he prayed for allowing of the revisions and acquittal of the petitioner/accused. To substantiate his arguments, he relied upon various decisions of the Apex Court and this Court.

8.Refuting the same, the learned counsel for the respondent/complainant submitted that the evidence of P.W.1, the respondent/complainant herein has clearly proved that the accused borrowed money and executed promissory notes and the accused issued the respective cheques to discharge the legally enforceable debt. Since the cheques were presented in the Bank for encahsment and returned as “insufficient funds”, a statutory notice was issued to the petitioner/accused under Section 138(b) of Negotiable Instruments Act. But the petitioner/accused has not repaid the amounts. Hence, the respondent/complainant lodged a complaint under Section 138 of Negotiable Instruments Act. He further submitted that since the petitioner/accused has admitted his signature in the cheques, the respondent/complainant can invoke the presumption under Sections 118 and 139 of Negotiable Instruments Act and the petitioner/accused has not rebutted the presumption by way of let in oral and documentary evidence. Though the firm M/S.M.V.K. Silk Sarees is not an accused, that itself does not absolve the liability of the accused, who is a Partner and also a signatory of the cheque. Hence, the petitioner/accused is liable for the return of the cheque due to “insufficient funds”. He further submitted that one can issue a cheque for discharging of liability of another. Hence, he prayed for confirming the judgment of conviction and sentence passed by both the Courts below. To substantiate his arguments, he relied upon various decisions of the Apex Court and this Court.
9.Considered the rival submissions made on both sides and the materials available on record.
10.Admittedly, promissory notes and cheques were alleged to be executed by the revision petitioner/accused herein. The signature in the cheques and promissory notes are never disputed by the revision petitioner/accused. The argument of the learned counsel for the petitioner/accused is that the petitioner is not an authorised signatory for dealing with the accounts of M/S.M.V.K. Silk Sarees. While perusing the promissory notes, they were issued on behalf of the firm M/S.M.V.K.Silk Sarees. In the said promissory notes, it was stated as “for M/S.M.V.K. Silk sarees, partner. So the petitioner/accused borrowed money on behalf of M/S. M.V.K. Silk sarees and issued cheques for discharging of the promissory notes, which were returned as “insufficient funds”. Statutory notices were issued on behalf of the partner of M/S.M.V.K. Silk Sarees and the same were received by the petitioner/accused. But, the petitioner/accused neither repaid the amount nor sent any reply. At the time of questioning under Section 313 Cr.P.C., the petitioner/accused never stated that he is not an authorised signatory. To prove the same, the petitioner/accused filed the Register of cheque book issued. On 02.08.1999, M/S.M.V.K.Silk Saress and its partners sent a letter to the Manager, Indian Overseas Bank, for closing account of the firm. But, Advocate notice was issued on 25.03.1999 and the same was received on 01.04.1999. After that only, the petitioner’s father and one of his brother have issued a communication to the Manager of the Bank for closing account of the firm. So it will not absolve from the criminal liability of the petitioner/accused.

11.At this juncture, it is appropriate to consider the decisions relied upon by the learned counsel for the petitioner/accused.
(a) CDJ 2010 SC 971 (P.J.Agro Tech. Limited and others v. Water base limited) in paragraphs-8 and 9, it read as follows:
“8. .. .. From a reading of the said Section, it is very clear that in order to attract the provisions thereof a cheque which is dishonoured will have to be drawn by a person on an account maintained by him with the banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part of any debt or other liability. It is only such a cheque which is dishonoured which would attract the provisions of Section 138 of the above Act against the drawer of the cheque.
9.In the instant case, the cheque which had been dishonoured may have been issued by the Respondent No.11 for discharging the dues of the Appellant No.1 Company and its Directors to the Respondent No.1 Company and the Respondent Company may have a good case against the Appellant No.1 Company for recovery of its dues before other fora, but it would not be sufficient to attract the provisions of Section 138 of the 1881 Act. The Appellant Company and its Directors cannot be made liable under Section 138 of the 1881 Act for a default committed by the Respondent No.11. An action in respect of a criminal or a quasi-criminal provision has to be strictly construed in keeping with the provisions alleged to have been violated. The proceedings in such matters are in personam and cannot be used to foist an offence on some other person, who under the statute was not liable for the commission of such offence.”
(b) CDJ 2009 SC 1411 (Jugesh Sehgal v. Shamsher Singh Gogi) in paragraph-9, it reads as follows:
“9.It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice; ”
(c) (2008) 4 SCC 54 (Krishna Janardhan Bhat v. Dattatraya G.Hegde) in paragraphs-34, 35 and 44, it read as follows:

“34. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is “preponderance of probabilities”. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies.
35. A statutory presumption has an evidentiary value. The question as to whether the presumption whether stood rebutted or not, must, therefore, be determined keeping in view the other evidence on record. For the said purpose, stepping into the witness box by the appellant is not imperative. In a case of this nature, where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration.
44.The presumption of innocence is a human right. (See Narendra Singh v. State of M.P., Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra and Rajesh Ranjan Yadav v. CBI) Article 6(2) of the European Convention on Human Rights provides : “Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law”. Although India is not bound by the aforementioned Convention and as such it may not be necessary like the countries forming European countries to bring common law into land with the Convention, a balancing of the accused’s rights and the interest of the society is required to be taken into consideration. In India, however, subject to the statutory interdicts, the said principle forms the basis of criminal jurisprudence. For the aforementioned purpose the nature of the offence, seriousness as also gravity thereof may be taken into consideration. The courts must be on guard to see that merely on the application of presumption as contemplated under Section 139 of the Negotiable Instruments Act, the same may not lead to injustice or mistaken conviction. It is for the aforementioned reasons that we have taken into consideration the decisions operating in the field where the difficulty of proving a negative has been emphasised. It is not suggested that a negative can never be proved but there are cases where such difficulties are faced by the accused e.g. honest and reasonable mistake of fact.”
(d) CDJ 2009 SC 776 (Ramrajsingh v. State of M.P. and another) in paragraphs-7, 8 and 14, it read as follows:
“7.This provision clearly shows that so far as the companies are concerned if any offence is committed by it then every person who is a Director or employee of the company is not liable. Only such person would be held liable if at the time when offence is committed he was in charge and was responsible to the company for the conduct of the business of the company as well as the company. Merely being a Director of the company in the absence of above factors will not make him liable.
8. To launch a prosecution, therefore, against the alleged Directors there must be a specific allegation in the complaint as to the part played by them in the transaction. There should be clear and unambiguous allegation as to how the Directors are incharge and responsible for the conduct of the business of the company. The description should be clear. It is true that precise words from the provisions of the Act need not be reproduced and the court can always come to a conclusion in facts of each case. But still in the absence of any averment or specific evidence the net result would be that complaint would not be entertainable.
14.The matter was again considered in Sabitha Ramamurthy and Anr. v. R.B.S.Channabasavaradhya and Anr. (2006 (9) SCALE 212) and Saroj Kumar Poddar v. State (NCT of Delhi) and Anr. (JT 2007 (2) SC 233). It was, inter-alia, held as follows:
“…. Section 141 raises a legal fiction. By reason of the said provision, a person although is not personally liable for commission of such an offence would be vicariously liable therefor. Such vicarious liability can be inferred so far as a company registered or incorporated under the Companies Act, 1956 is concerned only if the requisite statements, which are required to be averred in the complaint petition, are made so as to make the accused therein vicariously liable for the offence committed by the company. Before a person can be made vicariously liable, strict compliance of the statutory requirements would be insisted. ….” ”

He submitted that since the amounts were borrowed on behalf of the firm M/S.M.V.K. Silk Sarees, the complaint under Sections 138 and 141 of Negotiable Instruments Act is necessary. But, here, the complaint has been filed under Section 138 of Negotiable Instruments Act, which is not maintainable.
12.At this juncture, it is appropriate to consider the following decisions relied upon by the learned counsel for the respondent/complainant reported in (a)2000 Crl.L.J.373(1) (Anil Hada v. Indian Acrylic Ltd., ) in which, it reads as follows:

“When a company, which committed the offence under S.138 eludes from being prosecuted thereof, on account of complaint against it being dropped because of winding up proceedings ordered by Court, the Directors of that company can be prosecuted for that offence. The effect of reading S.141 is that when the company is the drawer of the cheque such company is the principal offender under Section 138 of the Act and the remaining persons i.e. viz. everyone who was in-charge of and was responsible for the business of the company and any other person who is a director or a manager or a secretary or officer of the company, with whose connivance or due to whose neglect the company has committed the offence who are persons falling within categories second and third of S.141(1) and (2) are made offenders by virtue of the legal fiction created by the legislature as per the section. Hence the actual offence should have been committed by the company, and then alone the aforesaid two categories of persons can also become liable for the offence. If the offence was committed by a company it can be punished only if the company is prosecuted. But instead of prosecuting the company if a payee opts to prosecute only the persons falling within the second or third category the payee can succeed in the case only if he succeeds in showing that the offence was actually committed by the company. In such a prosecution the accused can show that the company has not committed the offence, though such company is not made an accused, and hence the prosecuted accused is not liable to be punished. The provisions do not contain a condition that a prosecution of the company is sine qua non for prosecution of the other persons who fall within the second and the third categories mentioned above. No doubt a finding that the offence was committed by the company is sine qua non for convicting those other persons. But if a company is not prosecuted due to any legal snag or otherwise, the other prosecuted persons cannot, on that score alone, escape from the penal liability created through the legal fiction envisaged in Section 141 of the Act. Even if the prosecution proceedings against the company were not taken or could not be continued, it is no bar for proceeding against the other persons viz. Director, in instant case, falling within the purview of sub-sections (1) and (2) of S.141 of the Act.”
(b) 2009 (5) CTC 81 (K.K.Ahuja v. V.K.Vora and another) in paragraph-20, it reads as follows:
“20. The position under section 141 of the Act can be summarized thus :
(i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the Company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix `Managing’ to the word `Director’ makes it clear that they were in charge of and are responsible to the Company, for the conduct of the business of the company.
(ii)In the case of a Director or an Officer of the company who signed the cheque on behalf of the Company, there is no need to make a specific averment that he was in charge of and was responsible to the Company, for the conduct of the business of the Company or make any specific allegation about consent, connivance or negligence. The very fact that the dishonoured cheque was signed by him on behalf of the Company, would give rise to responsibility under sub-section (2) of Section 141.
(iii) In the case of a Director, Secretary or Manager (as defined in Sec. 2(24) of the Companies Act) or a person referred to in clauses (e) and (f) of section 5 of Companies Act, an averment in the Complaint that he was in charge of, and was responsible to the company, for the conduct of the business of the Company is necessary to bring the case under section 141(1). No further averment would be necessary in the Complaint, though some particulars will be desirable. They can also be made liable under Section 141(2) by making necessary averments relating to consent and connivance or negligence, in the Complaint, to bring the matter under that sub-section.
(iv)Other Officers of a Company can not be made liable under sub-section (1) of section 141. Other officers of a Company can be made liable only under sub-section (2) of Section 141, be averring in the Complaint their position and duties in the Company and their role in regard to the issue and dishonour of the cheque, disclosing consent, connivance or negligence.”
As per the dictum laid down in the apex Court, the partnership firm and the partners all are not necessary parties. The revision petitioner is the partner of M/S.M.V.K. Silk Sarees, who issued cheques for discharging legally enforceable debt, is liable for criminal prosecution. Hence, the argument advanced by the learned counsel for the petitioner that the complaint under Section 138 of Negotiable Instruments Act without impleading the firm M/S.M.V.K. Silk Sarees and other partners is not maintainable, does not merit acceptance.

13.The learned counsel for the petitioner/accused submitted that the petitioner is entitled to rebut the presumption under Section 139 of Negotiable Instruments Act on the basis of the materials brought on records by both the parties, even without examining the accused as a witness. To substantiate his argument, he relied upon the decision reported in CDJ 2007 SC 1118 (John K.John v. Tom Varghese and another) in paragraph-10, it reads as follows:
“10. Relationship between the parties is not in dispute. The complainant is a partner of a firm which is in the business of running chitty fund. The fact that the respondent subscribed three chitties and that he could not pay the instalments of the prized amount is not in dispute. Pendency of three civil suits filed by the firm through the appellant against the respondent is also not in dispute. The High Court upon analyzing the materials brought on records by the parties had arrived at a finding of fact that in view of the conduct of the parties it would not be prudent to hold that the respondent borrowed a huge sum despite the fact that the suits had already been filed against him by the appellant. Presumption raised in terms of Section 139 of the Act is rebuttable. If, upon analysis of the evidence brought on records by the parties, in a fact situation obtaining in the instant case, a finding of fact has been arrived at by the High Court that the cheques had not been issued by the respondent in discharge of any debt, in our opinion, the view of the High Court cannot be said to be perverse warranting interference by us in exercise of our discretionary jurisdiction under Article 136 of the Constitution of India. The High Court was entitled to take notice of the conduct of the parties. It has been found by the High Court as of fact that the complainant did not approach the court with clean hands. His conduct was not that of a prudent man. Why no instrument was executed although a huge sum of money was allegedly paid to the respondent was a relevant question which could be posed in the matter. It was open to the High Court to draw its own conclusion therein. Not only no document had been executed, even no interest had been charged. It would be absurd to form an opinion that despite knowing that the respondent even was not in a position to discharge his burden to pay instalments in respect of the prized amount, an advance would be made to him and that too even after institution of three civil suits. The amount advanced even did not carry any interest. If in a situation of this nature, the High Court has arrived at a finding that the respondent has discharged his burden of proof cast on him under Section 139 of the Act, no exception thereto can be taken.”

14.At this juncture, it is appropriate to consider the arguments advanced by the learned counsel for the respondent/complainant along with the decision reported in (2010) 11 SCC 441 (Rangappa v. Sri Mohan) in paragraphs-29 and 30, it read as follows:
“29. .. .. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant’s version. Apart from not raising a probable defence, the appellant-accused was not able to contest the existence of a legally enforceable debt or liability.
30. .. .. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant.”

Considering the above citation, once the signature is admitted by the accused, the complainant is entitled to invoke the presumption under Sections 118 and 139 of Negotiable Instruments Act. Here, the petitioner/accused has not disputed the signature in the cheques. In such circumstances, the respondent/complainant is entitled to invoke the presumption under Sections 118 and 139 of Negotiable Instruments Act. As already stated that the presumption is rebuttable presumption and that can be decided on the basis of the evidence let in by the respondent/complainant. On perusal of the witnesses P.W.1 to P.W.3 and the documents on the side of the prosecution and defence, the petitioner/accused has not rebutted the presumption under Section 139 of Negotiable Instruments Act.
15.The learned counsel for the respondent/complainant submitted that once issuance of cheques are admitted, the presumption mandated by Section 139 of Negotiable Instruments Act includes a presumption that there exists a legally enforceable debt or liability.

16.The learned counsel for the petitioner submitted that the cheques were issued by the petitioner for his personal liability. But, the cheques of M/S.M.V.K.Silk Sarees were issued. So the ingredients of Section 138 of Negotiable Instruments Act is not maintainable. But, considering the decision relied upon by the learned counsel for the respondent/complainant reported in 1999-1-L.W.(Crl.)395 (N.Vaidyanathan/Deepika Milk Marketing, rep. by its Proprietrix Mrs.Revathi Vaidyanathan v. M/S.Dodla Dairy Limited, Rep. by its Accounts Executive, R.Swaminathan) in which, it reads as follows:
“For the purpose of Section 138 of the Negotiable Instruments Act, it is immaterial that the cheque was issued for discharge of his own debt or liability as it can be issued for discharge of another man’s debt or liability.”
So I am of the view, it is immaterial that the cheques were issued for discharging of his own debt or liability and as it can be issued for discharging of another man’s debt or liability. So the Court can invoke Section 138 of Negotiable Instruments Act.

17.It is also appropriate to consider the arguments advanced by the learned counsel for the respondent that no one can capatalize his own mistake or fraud. Merely because the petitioner/accused has issued cheques on behalf of the firm M/S.M.V.K. Silk Sarees for his personal liability, so he can prosecute the criminal liability. To substantiate the above argument, he relied upon the following decision reported in 2010-1-L.W.(Crl.) 67 (M/S.Laxmi Khadi Niketan A Partnership firm rep. by its Partner, Chandramohan and another v. T.K.Palanisamy, rep. by his power agent Mr.P.Jaganathan) in paragraphs-8 to 10, it read as follows:
“8. I cannot countenance such an argument for the reason that no one can capatalize his own mistake or fraud. At this juncture, my mind is reminiscent and redolent of the following maxims: (i) Nul prendra advantage de son tort demesne
(ii) Nemo allegans suam turpitudinem audiendus est.
(iii) Nullus commodum capere potest de injuria
sua propria
The sum and substance of the above maxims are that no one can be allowed to capatalise his own fraud or mistake.
9. Here, at the time of issuance of the very cheques, A2 was fully aware of the fact now he pleads. But he did choose to issue those cheques by only signing it, which indicates and evinces the criminal intention on his part to even hood-wink and bamboozle, flummox and confuse, obfuscate and perplex, non-plus and floor the complainant and as such, he cannot be allowed to make such a plea now.
10. Over and above that, I could see considerable force in the submission made by the learned counsel for the respondent/complainant that the cheques were returned by the Bank not on the ground that two partners have not signed them, but on the ground, viz., ‘exceeds arrangements’. No doubt D.W.1 the Bank Manager would come and speak about the illegality of a cheque etc. However, for the reasons already set out supra, this Court cannot countenance the very plea put forth by A2. It is an arrangement between A1-the Partnership firm and the Banker with which the respondent company is not concerned with. The respondent/complainant is concerned only with the cheque. Law contemplated under Section 138 of the N.I. Act is a dishonour of cheque and nothing more.”

In view of the above citation, the argument advanced by the learned counsel for the petitioner that the petitioner has borrowed money for his own personal liability, but whereas the cheques were issued on behalf of the firm M/S.M.V.K. Silk Sarees. Hence, the ingredients of Section 138 of Negotiable Instruments Act has not been made out against the petitioner/accused, does not merit acceptance.

18.At this juncture, it is appropriate to consider the following decisions:
(a) (2002) 6 SCC 426 (ICDS Ltd., v. Beena Shabeer and another) in which, it reads as follows:
“Held:The words ” any cheque” and “other liability” occurring in Section 138 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. These expressions leave no manner of doubt that for whatever reason it may be, the liability under Section 138 cannot be avoided in the event the cheque stands returned by the banker unpaid. Any contra-interpretation would defeat the intent of the legislature. The High Court 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. ”

(b) (2007) 2 MLJ (Crl) 281 (Sayadu Beedi Company, rep. by Sivaraman v. Thirumalai Subbu @ Thirumalai) in which, it reads as follows:
“Section 138 of the Negotiable Instruments Act does not insist that the cheque should be one drawn to discharge the liability of the drawer and it can be issued for discharge of another man’s debt or liability.”

(c)2004 Crl.L.J.2220 (K.Venugopalan v. Moosa K.B.) in which, it reads as follows:

“Cheque is guarantee or security for repayment  Use of word ‘guarantee’ in complaint does not convey that cheque was not issued for due discharge of legally enforceable debt/liability  Offence under S.138 is made out against accused  However deterrent substantive sentence of imprisonment need not be imposed  Appropriate direction under S.357(3) of Cr.P.C. coupled with default sentence would meet ends of justice.”

So the cheques issued by the petitioner/accused for discharging the legal liability and he can not capatalize his own fraud or mistake. He very well know that he is not an authorised signatory to issue the respective cheques. So he cannot take advantage of the same. He never disputed the issuance of cheques. Since issuance of cheques and signature in the cheques were admitted, the respondent/complainant is entitled to invoke the presumption under Section 139 of Negotiable Instruments Act. Even though it is rebuttable presumption, the petitioner/accused herein has not rebutted the presumption under Section 139 of Negotiable Instruments Act. So I am of the view that the cheques were issued only for discharging legally enforceable debt. When the cheques were presented in the Bank, they were returned as “insufficient funds”, so the statutory notice was issued. But the petitioner neither repaid the cheque amounts nor sent any reply, except in Crl.R.C.No.95 of 2006. So the ingredients of Section 138 of Negotiable Instruments Act has been made out against the petitioner/accused. Hence, I am of the view that the petitioner/accused is guilty for the offence under Section 138 of Negotiable Instruments Act. Both the Courts below have considered all the aspects in proper perspective and came to the correct conclusion. So the judgment of conviction and sentence passed by both the Courts below does not warrant any interference. Hence, the revisions preferred by the petitioner/accused deserve to be dismissed and hence they are hereby dismissed.

19.The learned counsel for the petitioner also relied upon the decision reported in CDJ 2011 SC 206 (Chairman, Bhartia Education Society and another v. State of Himachal Pradesh and others) in which, it reads as follows:
“Court cannot grant relief to a party on humanitarian grounds contrary to law. ”

Since the petitioner/accused is guilty for the offence under Section 138 of Negotiable Instruments Act, the above citation is not applicable to the facts of the present case.
20.In fine,
The Criminal Revisions are dismissed.
The judgment of conviction and sentence passed by both the
Courts below are hereby confirmed.
The bail bond executed by the petitioner/accused, if any,
shall stand cancelled.
The trial Court is directed to take steps to secure the
petitioner/accused to undergo the remaining period of sentence imposed on him.

29.04.2011
Index : Yes
Internet : Yes
kj
To

1. VI Additional Sessions Judge
Chennai.

2.XVIII Metropolitan Magistrate Court
Saidapet, Chennai.

3.The Public Prosecutor
High Court, Madras.

4.The Record Keeper
Criminal Section
High Court, Madras.
R.MALA,J.
kj

 

 

 

 
pre-delivery judgment in

Crl.R.C.Nos.93 to 96 of 2006

 

 

 

 

 

 

29.04.2011

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