Muthulakshmi V. K.Padmanabhan

[MADRAS HIGH COURT]

Muthulakshmi, Through Her Power Agent, P.Sakthivel
v
K.Padmanabhan

A. SELVAM

24 Jun 2008
BENCH
A. SELVAM

ACTS REFERRED
Negotiable Instruments Act, 1881[s. 138, s. 142]
Code of Criminal Procedure, 1973 (as amended by Act No. 25 of 2005 & Act No. 2 of 2006.)[s. 255(1), s. 313]
CASE NO
Crl.A.No.914 of 2001

The Order of the Court was as follows :

1. The judgment dated 14.08.2001 passed in Calendar Case No.284 of 1996 by the Judicial Magistrate Court, Rajapalayam is now under challenge.

2. The appellant herein as complainant has filed a complaint under Sections 138 read with 142 of the Negotiable Instruments Act, 1881 on the file of the trial Court, wherein the present respondent has been shown as sole accused.

3. In the complaint, it has been specifically stated that the accused has been serving as a teacher and the complainant has been residing in the house of the accused. The accused has received a sum of Rs.3, 08, 008/- by way of debt from the complainant and thereby executed a pro-note. On 28.03.1996 both the complainant and the accused have entered into an agreement, whereunder it has been agreed to encash the amounts mentioned in the cheques given by the accused. The cheques given by the accused have been presented in the concerned Bank by the complainant on 27.07.1996 and the same have been returned on 30.07.1996 and subsequently the complainant has given a statutory notice on 08.08.1996. The accused, after receipt of the same, has given a reply notice containing false allegations. Since the accused has failed to discharge his liability, he has committed offence under Section 138 of the Negotiable Instruments Act, 1881. Under the said circumstances, the present complaint has been filed.

4. The accused has been questioned with regard to the offence alleged to have been committed by him, but he denied his culpability. On the side of the complainant, PWs.1 to 3 have been examined and Exs.P1 to P9 have been marked. When the accused has been questioned under Section 313 of the Code Of Criminal Procedure, 1973, as respects the incriminating circumstances appearing in evidence against him, he denied his complicity in the crimes. On the side of the accused, DW1 has been examined and Exs.D1 to D4 have been marked.

5. The trial Court, after contemplating the rival evidence adduced on either side, has found the accused not guilty under Section 138 of the Negotiable Instruments Act, 1881 and ultimately acquitted him under Section 255(1) of the Code Of Criminal Procedure, 1973. Against the order of acquittal, the present criminal appeal has been filed at the instance of the complainant.

6. The specific contentions urged on the side of the appellant/complainant are that the accused has been serving as a teacher and the complainant has been residing in the house of the accused and he has received Rs.3, 08, 008/- from the complainant by way of executing a pro-note and subsequently an agreement has come into existence betwixt them and accordingly the accused has given the cheques in question and the same have been presented in the concerned Bank for collection and the concerned Bank has returned the same and subsequently, the complainant has given a statutory notice and even after receipt of the same, the accused has not discharged his liability and thereby he has committed offence under Section 138 of the Negotiable Instruments Act, 1881.

7. The learned counsel appearing for the appellant/complainant has contended with great vehemence that the accused has received the amount mentioned in the complaint and in order to discharge the same, he has given the cheques in question and the same have been presented in the concerned Bank and the concerned Bank has returned the same and subsequently, a statutory notice has been given to the accused and even after receipt of the same, the accused has failed to discharge his liability and in order to prove the culpability of the accused, enormous documents have been produced on the side of the appellant/complainant, but the trial Court without considering the documents filed on the side of the appellant/complainant properly, has erroneously acquitted the accused and therefore the judgment passed by the trial Court is liable to be interfered with and the accused is liable to be mulcted with punishment.

8. Per contra, the learned counsel appearing for the respondent/accused has ingeniously contended that the accused has received the amount mentioned in the complaint from the complainant and he has also given the cheques in question and after issuance of the cheques in question, a sale agreement has been entered into betwixt the complainant and the accused, his brother and mother, whereby it has been agreed to sell the property of the accused, in which the complainant has been residing and the sale consideration has been fixed at Rs.3, 35, 000/- and after deducting the amounts which has been received by the accused from the complainant, the complainant has to pay the balance of sale consideration of Rs.27, 000/- and since the amounts mentioned in the cheques in question have been merged with the sale consideration which has been fixed in sale agreement, no amount is due from the accused on the basis of the cheques in question and the complainant has also filed Original Suit No.345/99 on the file of the Subordinate Court, Srivilliputhur for the relief of specific performance on the basis of sale agreement against the accused, his mother and brother, and since no enforceable debt is in existence on the basis of the cheques in question, the accused cannot be said that he has committed offence under Section 138 of the Negotiable Instruments Act, 1881 and the trial Court, after considering all the rival contentions raised on either side, has rightly acquitted the accused and therefore, the judgment passed by the trial Court is not liable to be interfered with.

9. For considering the rival submissions made by either counsel, it would be apropos to look into the provision of Section 138 of the Negotiable Instruments Act, 1881. The same reads as follows;

"Dishonour of cheque for insufficiency, etc., of funds in the account:-

Where any cheque drawn by a person on an account maintained by him with a 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, is returned by the bank unpaid, either because of the amount of money standing to the credit of that 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 that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both. Provided that nothing contained in this Section shall apply unless -

(a) the 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;

(b) the payee or the holder in due course of the cheque, as the case may be, 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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice." Explanation.- For the purpose of this Section, "debt or other liability" means a legally enforceable debt or other liability. *

10. The provision of Section 138 of the said Act can be vivisected as follows;

a) The cheque in question must be drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person.

b) The cheque in question must be given only for the purpose of discharging the whole or part of any debt or liability.

c) The cheque in question must be returned and unpaid by the concerned bank.

d) The cheque in question must be given only for the purpose of discharging a legally enforceable debt or other liability.

11. On the basis of these legal backdrops, we have to decide the present case. The only point which has now winched in the present case is as to whether the cheques in question have been issued only for the purpose of discharging a legally enforceable debt or other liability. The specific contention of the appellant/complainant is that the accused has received the amount mentioned in the complaint from the complainant and in order to discharge his liability, the cheques in question have been issued and since the same have been returned and since the accused has failed to discharge his liability, even after the receipt of statutory notice, he has committed offence under Section 138 of the Negotiable Instruments Act, 1881.

12. As enunciated earlier, the crux of the contention of the respondent/accused is that the accused has received the amount mentioned in the complaint, and subsequently, the accused, his mother and brother have agreed to sell the property of the accused, wherein the complainant has been residing, for a sum of Rs.3, 35, 000/- and to that effect a sale agreement has been entered into betwixt them and the amounts mentioned in the cheques issued by the accused are treated as part of sale consideration and therefore, the cheques in question have no legal force so as to constitute the offence mentioned under Section 138 of the Negotiable Instruments Act, 1881.

13. It is an admitted fact that the appellant/complainat has been residing in the house of the accused. It is also equally an admitted fact that the accused has received the amount mentioned in the complaint from the complainant by way of executing a pro-note and subsequently he issued the cheques in question. After issuance of the cheques, the accused, his mother, brother and the complainant have entered into a sale agreement, whereby the accused, his mother and brother have agreed to sell the property of the accused in favour of the complainant for a sum of Rs.3, 35, 000/-. Further it has been agreed that the amounts mentioned in the cheques in question have been treated as part of sale consideration. After deducting amounts mentioned in the cheques, the complainant has to pay the remaining part of sale consideration to the tune of Rs.27, 000/- to the accused. Further the complainant has instituted Original Suit No.345 of 1999 on the file of the Subordinate Court, Srivilliputhur, for the relief of specific performance, on the basis of sale agreement. Therefore, it is quite clear that the amounts mentioned in the cheques in question have been merged with sale consideration and after merger, the cheques in question have lost its legal force. The appellant/complainant, after dismissal of the suit filed in Original Suit No.345 of 1999 has filed the present complaint.

14. It has already been pointed out that after sale agreement, the cheques in question have lost its legal force and the amounts mentioned in the cheques have merged with sale consideration and after merger, no legally enforceable debt is in existence between the complainant and accused, and since no legally enforceable debt is in existence between them, it is needless to say that the accused has not committed offence under Section 138 of the Negotiable Instruments Act, 1881. # The trial Court, after considering all the divergent contentions raised on either side, has rightly found the accused not guilty under the said Section.

15. In view of the discussion made earlier, it is very clear that the argument advanced by the learned counsel appearing for the appellant/complainant is not having subsisting force and whereas the argument advanced by the learned counsel appearing for the respondent/accused is really having subsisting force.

16. In fine, this criminal appeal deserves dismissal and accordingly is dismissed. The judgment passed in Calendar Case No.284 of 1996 by the Judicial Magistrate Court, Rajapalayam is confirmed.