BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 01/07/2009 CORAM THE HONOURABLE MR.JUSTICE A.SELVAM Crl.A.Nos.1223 to 1226 of 2001 S.Kamatchi . . . Appellant in Crl.A.No.1223/2001/ Complainant P.Kalyanasundaram . . . Appellant in Crl.A.Nos.1224 & 1225/ 2001/Complainant P.Chandrasekaran . . . Appellant in Crl.A.No.1226/2001 /Complainant Vs. 1.M/s.Arkaa Medicament, through its Managing Director, Mr.A.Dhanasekaran 2.A.Dhanasekaran . . . Respondents in
all the appeals/
Accused
These criminal appeals have been filed under Section 378(4) of Cr.P.C.
against the judgment dated 30.11.2001 passed in Criminal Appeal Nos.133 to 136
of 2000 by the Additional District and Sessions cum Fast Track Court No.III,
Madurai, reversing the conviction and sentence passed in Calendar Case Nos.199,
277, 539 & 540 of 1998 by the Judicial Magistrate Court No.II, Madurai.
!For appellants in
all the appeals … Mr.V.R.Shanmuganathan
for M/s.A.L.Gandhimathi
^For respondents in
all the appeals … Mr.T.Muruganandham
:COMMON JUDGMENT
Challenge in these criminal appeals is to the judgments passed in Criminal
Appeal Nos.133 to 136 of 2000 by the Additional District and Sessions cum Fast
Track Court No.III, Madurai, wherein the conviction and sentence passed in
Calendar Case Nos.199, 277, 539 & 540 of 1998 by the Judicial Magistrate Court
No.II, Madurai are set aside.
2.In the complaint filed in C.C.No.199 of 1998, it is stated that the
first accused is a partnership firm and in which the second accused is one of
its partners. The second accused has approached the complainant for getting
financial assistance and borrowed money in the year 1990 and on 10.03.1995 the
amount has been calculated to the tune of Rs.54,000/- and for the said amount,
the second accused for himself and on behalf of the first accused, has executed
a pro-note. The second accused has admitted and acknowledged the liability and
with the intention to repay the same, he has given the cheque in question on
15.08.1997 for a sum of Rs.54,000/- in favour of the complainant and the same
has been presented in the concerned bank and the concerned bank has retuned the
cheque in question stating ‘funds insufficient’ and subsequently a legal notice
has been issued and even after receipt of the same, the accused have failed to
discharge their liability and under the said circumstances, the accused are said
to have committed offence under Section 138 of the Negotiable Instruments Act,
1881.
3.In the complaint filed in C.C.No.539 of 1998, it is stated that the
first accused is a partnership firm and in which the second accused is one of
its partner. The second accused for himself and on behalf of the first accused
has approached the complainant for getting loan and he received money in the
year 1990 and on 10.03.1995 the amount has been calculated to the tune of
Rs.21,080/- and on the same day, he has executed two pro-notes, each for a sum
of Rs.10,540/- and he issued the cheque in question for a sum of Rs.21,080/- in
favour of the complainant and the same has been presented in the concerned bank
and the concerned bank has returned the same stating ‘funds insufficient’ and
subsequently a legal notice has been issued to the accused and even after
receipt of the same, the accused have failed to discharge their liability and
under the said circumstances, the accused have committed offence under Section
138 of the Negotiable Instruments Act, 1881.
4.In the complaint filed in C.C.No.540 of 1998, it is stated that the
first accused is a partnership firm and in which the second accused is one of
its partner and the second accused for himself and on behalf of the first
accused, has approached the complainant for getting money and he borrowed the
same in the year 1990 and on 10.03.1995 the amount has been calculated to the
tune of Rs.17,360/- and on that day, the second accused has executed a pro-note
for the said sum in favour of the complainant and he has also issued a cheque
for the said sum in favour of the complainant and the same has been presented in
the concerned bank and the concerned bank has returned the same stating ‘funds
insufficient’ and subsequently a legal notice has been issued and even after
receipt of the same, the accused have failed to discharge their liability and
under the said circumstances, they have committed offence under Section 138 of
the Negotiable Instruments Act, 1881.
5.In the complaint filed in C.C.No.277 of 1998, it is stated that the
first accused is a partnership firm and in which the second accused is one of
its partners. The second accused has approached the complainant for getting
financial assistance and he borrowed money in the year 1990 and on 10.03.1995
the amount has been calculated at Rs.21,300/- and on the same day, for the said
sum of Rs.21,300/- the second accused has executed a pro-note and also issued a
cheque for the said sum in favour of the complainant and the same has been
presented in the concerned bank and the concerned bank has returned the same
stating ‘funds insufficient’ and subsequently a legal notice has been issued and
even after receipt of the same, the accused have failed to discharge their
liability and under the said circumstances, the accused have committed offence
under Section 138 of the Negotiable Instruments Act, 1881.
6.The trial Court, after considering all the evidence available on record,
has found both the accused guilty under Section 138 of the Negotiable
Instruments Act, 1881 and imposed a fine of Rs.1,000/- with default clause
against the first accused and six months simple imprisonment against the second
accused and also directed both the accused to pay the amount mentioned in each
cheque as compensation. Against the conviction and sentence passed in
C.C.Nos.199, 277, 539 & 540 of 1998, the accused as appellants have preferred
Criminal Appeal Nos.133 to 136 of 2000 on the file of the first appellate Court.
7.The first appellate Court, after hearing both sides and after
reappraising the evidence available on record, has allowed all the appeals and
thereby set aside the conviction and sentence passed by the trial Court in
Calendar Case Nos.199, 277, 539 & 540 of 1998. Against the judgment passed by
the first appellate Court in Criminal Appeal Nos.133 to 136 of 2000, these
criminal appeals have been filed at the instance of the complainant in each
case.
8.The contentions mentioned in all the complaints are that the first
accused is a partnership firm and the second accused is one of its partners and
during the year 1990, the second accused for himself and on behalf of the first
accused has approached the complainants to get financial assistance and
accordingly the amount mentioned in each complaint has been advanced to the
second accused and the second accused has received the same for himself and on
behalf of the first accused and on 10.03.1995 amounts have been calculated and
to that extent the second accused has executed pro-notes in favour of the
complainants and on the same day, he issued the cheques in question in favour of
the complainants and the cheques in question have been presented in the
concerned bank and the concerned bank has returned the same stating ‘funds
insufficient’ and subsequently all legal formalities have been observed.
9.The trial Court, has found both the accused guilty under Section 138 of
the Negotiable Instruments Act, 1881 and invited conviction and sentence as
stated supra. But, the first appellate Court, has come to the conclusion that
the cheques in question have been given in respect of time barred debts and
therefore, the accused cannot be mulcted with punishment under Section 138 of
the Negotiable Instruments Act, 1881.
10.Since common questions of law and facts are involved in these criminal
appeals, common judgment is pronounced.
11.Before contemplating 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 and the same reads as follows;
“Dishonour of cheque for insufficiency, etc., of funds in the accounts.-
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 provisions of this Act, be punished with
imprisonment for a term which may extend to one year, 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 of 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 fifteen 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.”
12.From the explanation given to the said section one can easily discern
that the cheque in question should be given in connection with a legally
enforceable debt or other liability and in a nut-shell on the date of issuance
of cheque in question a legally enforceable debt or other liability must be in
existence. If a cheque has been given not with regard to legally enforceable
debt or other liability, the Court cannot come to a conclusion that the drawer
of the cheque has committed offence under Section 138 of the Negotiable
Instrument Act, 1881.
13.The learned counsel appearing for the appellants/complainants in all
the criminal appeals has repeatedly contended that the first accused is a
partnership firm and the second accused is one of its partners and during the
year 1990, the second accused has approached the complainants to get financial
assistance and he obtained loan from the complainants in the said year and on
10.03.1995 the amounts due from the accused have been arrived at and on the same
day, the second accused for himself and on behalf of the first accused has
executed pro-notes mentioned in the complaints in favour of the respective
complainant and he also issued the cheques in question in favour of the
respective complainant and even though the loans have been advanced to the
accused in the year 1990, the accused have paid interest and therefore, the loan
mentioned in each complaint is not barred by limitation and the trial Court,
after considering all the contentions raised on either side has rightly found
both the accused guilty under Section 138 of the Negotiable Instruments Act,
1881, but the first appellate Court, without considering the contentions urged
on the side of the respective complainant, has erroneously come to the
conclusion that on the date of issuance of the cheques in question loans in
question have become time barred and the cheques in question have not been
issued on the basis of legally enforceable debt and therefore, the conclusion
arrived at by the first appellate Court is totally erroneous and the same is
liable to be set aside.
14.Per contra, the learned counsel appearing for the respondents/accused
in each criminal appeal has also equally contended that in each complaint, it
has been specifically stated that the loans in question have been given in the
year 1990 and no document has been produced so as to establish the alleged fact
that the accused one and two have paid interest to the respective complainant
and the trial Court, without considering the question of limitation properly,
has erroneously found the accused guilty under Section 138 of the Negotiable
Instruments Act, 1881, but the first appellate Court has rightly come to the
conclusion that the cheques in question have not been issued so as to discharge
a legally enforceable debt and therefore, the conclusion arrived at by the first
appellate Court in each appeal is perfectly correct and the same need not be
interfered with.
15.In order to perpend the rival submissions made by either counsel, the
Court has to look into the allegations made in the complaints. In all the
complaints, it has been specifically stated that the second accused on behalf of
the first accused has approached the complainants in the year 1990 and obtained
the amount mentioned in the respective complaint by way of loan and on
10.03.1995 the amounts due have been arrived at and on the same day, the second
accused on behalf of the first accused has executed pro-notes in favour of the
respective complainant and also issued the cheques in question.
16.The only legal point that has now winched to the fore in the present
criminal appeals is ;
“Whether the cheques in question have been issued in respect of legally
enforceable debts or not?”
17.The specific case of the complainant in each complaint is that the
second accused on behalf of the first accused has received loan in the year 1990
and on 10.03.1995 the amounts due from the accused have been arrived at and the
second accused has executed pro-notes in favour of the respective complainant.
But, to utter dismay, no such pro-note has been marked on the side of the
complainant in each case. The admitted case of the complainant in each case is
that the loan in question has been advanced in the year 1990. The learned
counsel appearing for the appellants/ complainants has argued that after getting
loan in the year 1990, the accused have paid interest on several occasions.
But, to prove the same, no document has been marked on the side of the
complainants. Further as stated earlier, even though a settlement has been
arrived at on 10.03.1995 and pro-notes have been executed by the accused, no
pro-note has been marked on the side of the complainants. Therefore, it is
quite clear that the cheque mentioned in each complaint has been given in
respect of time barred debt.
18.The cheque in question which has been marked in C.C.No.199 of 1998 has
been given on 15.08.1997. The cheque in question which has been marked in
C.C.No.539 of 1998 has been given on 15.08.1997. Likewise, the cheque in
question which has been marked in C.C.No.540 of 1998 has been given on
15.09.1997. The cheque in question which has been marked in C.C.No.277 of 1998
has been given on 01.08.1997.
19.It has already been pointed out that as per the explanation given under
Section 138 of the Negotiable Instruments Act, 1881, the cheque in question must
be given only in respect of legally enforceable debt or other liability. In the
instant cases, the debt mentioned in every complaint has become time barred on
the date of issuance of the cheque in question. Further no valid
acknowledgement of debt has been established on the side of the complainants.
As per Section 19 of the Limitation Act, a debt should be acknowledged within
the period of limitation. In the instant cases, as taunted earlier, even though
it has been contended on the side of the appellants that the accused have paid
interest, no document has been forthcoming to that effect. Further a time
barred debt cannot be construed as a legally enforceable debt. Under the said
circumstances, the Court can safely come to a conclusion that the cheques in
question have not been given in respect of legally enforceable debts and on that
score alone, all the complaints are liable to be dismissed.
20.The learned counsel appearing for the appellants/complainants has also
advanced another limb of argument stating that in the instant cases, no defence
has been taken on the side of the accused with regard to limitation and
therefore, the Court is not bound to look into it, but the first appellate Court
has unnecessarily given a finding to the effect that the cheques in question
have been given only in respect of time barred debts and the finding given by
the first appellate Court is nothing but supernumerary and the same is liable to
be rejected.
21.It is an everlasting principle of law that a person who institutes a
legal proceeding is bound to say that the same is within the contour of
limitation. But it is not the duty of opposite party to take the plea of
limitation as a defence and the Court is having ample power to look into
limitation even though the same has not been taken as a defence. Further in the
present cases, the complainants have not at all explained that the alleged
transactions made between them and accused are not barred by limitation.
Therefore, the entire arguments advanced by the learned counsel appearing for
the appellants/ complainants are of no use.
22.The learned counsel appearing for the appellants/complainants has
accited the following decisions:
a) In AIR 2002 Supreme Court 985 (A.V.Murthy Vs. B.S.Nagabasavanna) it
has been held that dismissal of a complaint filed under Section 138 of the
Negotiable Instruments Act, at threshold on the ground that as amount was
advanced 4 years prior to the issuance of cheque, is illegal.
In the above case, the Honourable Apex Court has come to the conclusion
that with regard to the amount in question, the accused therein has shown the
same in his balance sheet for every year and the same amounts to valid
acknowledgement. Under the said circumstances, the Honourable Aped Court has
held that the dismissal of the complaint at threshold is improper.
In the instant cases, no such occasion has arisen. As taunted earlier, no
acknowledgement has been proved on the side of the complainants. Therefore, the
decision referred to supra cannot be attuned in the present case.
b)In 2007 STPL (DC) 988 Bombay (Purushottam Vs. Manohar K.Deshmukh &
another), it has been held that the accused has admitted during his examination
under Section 313 of the Code of Criminal Procedure that he had received money
from the complainant and under the said circumstances, the order of acquittal is
improper.
In the instant cases, no such admission has been made by the accused 1 &
2 and therefore, the decision referred to above is not having application to the
facts of the present cases.
c)In 2008 STPL(DC) 322 Bombay (Nagpur Bench) (Vijay Ganesh Gondhlekar Vs.
Indranil Jairaj Damale) it has been held that the loan in question has been
advanced on 01.03.1995 and the cheque in question has been issued on 01.03.1999
and during interregnum period the loan has been renewed in the year 1996 and
also in the year 1997. Under the said circumstances, a valid acknowledgement
has been made within the meaning of Section 18 of the Limitation Act.
As stated earlier, no acknowledgement has been made in the present cases
and the alleged payment of interest has not at all been proved by the
complainants and therefore, the facts of the present cases are totally contra to
the facts of the decisions referred to supra and under the said circumstances,
the decision referred to supra cannot be relied upon.
d)In 2001(4) CTC 382 (SC) (K.N.Beena Vs. Muniyappan and another) in view
of the presumption contains in Sections 118 and 139 of the Negotiable
Instruments Act, the Court has to presume that the cheque had been issued for
debt or other liability and the presumption is rebuttable.
In the instant cases, the specific contention of the complainant is that
the loans in question have been given in the year 1990 and subsequently amounts
have been calculated till 10.03.1995 and on the same day, pro-notes have come
into existence and thereafter, the cheques in question have been issued on
various dates. But, the above aspects have not been proved on the side of the
complainants. Under the said circumstances, the presumptions available under
Sections 118 and 139 of the Negotiable Instruments Act cannot be drawn in favour
of the complaints.
e)In (III) 2007 BC 752 Karnataka (S.Parameshwarappa and another Vs.
S.Choodappa) it has been held that the accused-drawer cannot seek dismissal of
complaint on the ground of want of consideration or legally enforceable debt for
issuance of the cheque. Only after cheque presented after its valid period,
such contentions would arise.
It has already been discussed in detail and ultimately found that the
cheque in question under Section 138 of the Negotiable Instruments Act, 1881
must be given only in respect of a legally enforceable debt or other liability
and a time barred debt cannot be construed as a legally enforceable debt.
Therefore, in the instant cases all the cheques in question have been given only
in respect of time barred debts. Under the said circumstances, it cannot be
said that the accused have committed offences under the said sections.
23.The first appellate Court has mainly relied upon the following
decisions;
a)In 1997 (2) Crimes 658 (Andhra Pradesh High Court) it has been held that
the alleged loan has been advanced in the year 1985 and the cheque has been
issued in the year 1990 and the debt has become time barred. By issuance of
cheque, limitation has not been extended.
b) In 2001 MLJ (Crl.) 115 (Kerala) (Joseph Vs. Devassia) it has been held
that the alleged loan has been given to the accused in January 1988 and the
cheque has been issued in February 1991 and debt has become time barred and
there is no valid acknowledgement of liability.
24.Since this Court is of the considered view that a time barred debt
would not come within the meaning of a legally enforceable debt and since the
same view has been taken by the High Courts of Andharpradesh and Kerala as per
the decisions mentioned supra, this Court is not in a position to rely upon the
decision rendered by the Karnataka High Court reported in (III) 2007 BC 752
Karnataka (S.Parameshwarappa and another Vs. S.Choodappa). Therefore, viewing
from any angle, the entire contentions urged on the side of the
appellants/complainants cannot be accepted.
25.The first appellate Court, after having threadbare discussion in each
appeal has clearly come to the conclusion that the debt mentioned in each
complaint is barred by limitation and this Court has not found any valid reason
to make interference with the well merited judgments passed by the first
appellate Court and altogether the present criminal appeals deserve dismissal.
27.In fine, these criminal appals deserve dismissal and accordingly are
dismissed. The judgments rendered in Criminal Appeal Nos.133 to 136 by the
Additional District and Sessions cum Fast Track Court No.III, Madurai are
confirmed.
gcg
To
1.The Additional District and Sessions Judge,
FTC No.III, Madurai.
2.The Judicial Magistrate No.II,
Madurai.