ORDER
A. Packiaraj, J.
1. The petitioner has been convicted for offence under Section 138 Negotiable Instruments Act and sentenced to undergo Imprisonment for one year and to pay a fine of Rs.5000/-, in default to undergo simple imprisonment for three months, in CC NO. 7540 of 1997 on the file of the VI Metropolitan Magistrate, Egmore, Chennai, against which, the petitioner preferred an appeal in C.A. NO. 234 of 1999 and the same was heard by the VI Additional Sessions Judge, Chennai, who confirmed the conviction and sentence passed by the trial magistrate. The present revision has been filed against the said judgments.
2.The brief facts of the prosecution case is as follows:-
a)A complaint had been filed by Thiru. R. Govindarajan, Power of Attorney Holder of Ms. G. Malini, Proprietrix of Sakthi Asphalts & Pelts, Arumbakkam, Chennai-106, on the allegation that the accused, on 17.02.1997, placed an order with the complainant for supply of Bitumen, Tarfelt and Primer for a total value of Rs.4,36,110/- for the purpose of doing work at Neyveli Lignite Corporation. The accused/petitioner is said to have given three cheques in all, one bearing No. 461936 dated 26.5.1997 for Rs.2,69,510/- the other bearing cheque No. 461937 dated 5.6.1997 for Rs.1,00,000/- and the last bearing No. 461938 dated 15.6.1997 for Rs.66,000/-, all drawn on Indian Overseas Bank, Neyveli.
b)On 6.6.1997, the cheques were presented in the said Bank for encashment but they were returned dishonored with an endorsement ‘refer to drawer’. This was intimated to the accused in person, but the accused requested the complainant to re-present the above said cheques in the bank, with assurance that he would arrange funds in his bank accounts to realise the cheques. Believing the words of the accused, the complainant again presented the cheques on 6.8.1997 in the said Bank. But all the three cheques were returned dishonored on 11.8.1997, with a memo stating “Payment countermanded by the drawer”.
c)A legal notice, as contemplated under the Negotiable Instruments Act, dated 27.8.1997 was sent to the accused calling upon him to pay the cheque amount. But the accused did not reply. The complainant waited till the mandatory period was over and then the present complaint has been lodged.
3. To substantiate the case, the prosecution has examined PW-1 to PW-3. It may not be necessary for me to dwell deep into the evidence of these witnesses, since two courts have already gone into their evidence and given concurrent findings accepting the evidence of the witnesses. On the side of the accused, 2 witnesses were examined.
4. The specific case of the accused is that he had given directions to stop payment to the bank, since the goods supplied by the complainant was not up to the standard and hence there was no liability for him to honour the cheques. According to the accused, when the cheques were presented in the bank, there were sufficient funds and hence the cheques were not dishonored for insufficiency of funds but only on the direction given by the accused to stop payment, as there was dispute in relation to the quality of the goods supplied. Consequently, according to the learned counsel for the petitioner, the offence under Section 138 is not attracted.
5. The learned counsel for the petitioner would base his arguments on the decision of Kusum Ingots & Alloys Ltd. Versus Pennar Peterson Securities Ltd and Others reported in 2000 Supreme Court Cases (Cri)546, wherein their Lordships have laid the following ingredients that are to be satisfied for making out a case under the provision of 138 Negotiable Instruments Act :-
“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 for the discharge of any debt or other liability;
ii) 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;
iii) that cheque is returned by the bank unpaid, either because 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;
iv) 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;
v) 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.”
6. The learned counsel for the petitioner vehemently argues that when there was enough cash in the credit of the petitioner in the bank and the cheque has been countermanded only on the ground `stop payment’ and hence the offence under Section 138 Negotiable Instruments Act is not attracted.
7. In my opinion, the learned counsel has failed to note that there is yet another decision in MMTC Ltd. and another Vs. M/s Medchl Chemicals & Pharma (P) Ltd and another reported in 2001 (4) CTC 749, also a decision of the Supreme Court wherein their lordships have held, following the decision reported in Modi Cement Ltd. V. Kuchil Kumar Nandi, as follows:-
It has been held that even though the cheque is dishonored by reason of ‘stop payment’ instruction an offence under section 138 could still be made out. It is held that the presumption under section 139 is attracted in such a case also. The authority shows that even when the cheque is dishonored by reason of stop payment instructions by virtue of section 139 the court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt of liability. Of course, this is a rebuttable presumption. The accused can thus show that the ‘stop payment’ instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 would not be made out. The important thing is that the burden of so proving would be on the accused.”
8. From this decision it is clear that though the accused has given a direction for stop payment, it must be substantiated by the accused that he had given such instructions, since there was no liability. The learned counsel for the petitioner submitted that in order to establish this fact, the accused had cross examined PW-1, the complainant, by way of putting suggestion that the goods sent by him were not upto the standard and that the Neyveli Lignite Corporation has not accepted the said goods and these three cheques had been supplied only by way of security, on condition that only after the Neyveli Lignite Corporation accepts the goods, these three cheques could be deposited in the bank. However, this suggestion has been denied by PW-1. If really the accused had directed the bank to stop payment only on account of the reason, the goods being sub standard, certainly the moment the Neyveli Lignite Corporation refused to accept the goods, the accused would have intimated the complainant about the factum of the goods being sub standard and then directed him to take back the goods and that the cheques should not be presented to the bank. Admittedly, the accused had not done so and there is also no explanation. In this context, it is pertinent to note that the Supreme Court in Hiten P. Dalal Vs. Bratindranath Banerjee, reported in 2001 SCC (Crl) 960, which has been subsequently followed by the Supreme Court in K.N. Beena Vs. Muniyappan and another reported in 2002 SCC (Crl) 14, has held that a mere plausible explanation given by the accused is not enough. The accused has to necessarily prove in the trial, by leading cogent evidence that there was no debt or liability. Therefore, in this case, I am of the opinion that the accused has neither proved that he is not liable to pay the amount nor has a plausible explanation given.
9. The accused has produced Ex.D-12, dated 7.3.1997, the intimation received from the Neyveli Lignite Corporation to disclose that the materials supplied by the accused to the Corporation were sub standard. From this the learned counsel wants to infer that the goods sent by the complainant were sub standard.
10. According to the complainant, the accused had asked him to re-present the cheques after 11.6.1997. This shows that if really, the intention of the accused was not to get the cheques honoured and if really the goods had been returned as sub standard even on 07.03.1997 he would not have directed the complainant to re-present the cheques in the bank. Therefore, Ex.D-12, the communication from the Corporation stating that the goods supplied to it by the accused may not be the one that relates to the supplies made by the complainant herein. Yet another additional factor which goes a long way to prove the guilt of the accused is the factual aspect of the goods in not replying to the notice issued by the complainant contemplated under Section 138 Negotiable Instruments Act.
11. Admittedly, notice had been issued to the complainant on 27.8.1997, calling upon him to pay the said cheque amount of Rs.4,36,110/- within 15 days from the date of the receipt of the notice. The said notice was received by the accused on 28.8.1997. But the accused has not replied for the same. If really, the accused is not entitled to pay the amount and if there has been a dispute nothing prevented him from denying his liability to establish that he is not entitled to pay the amount. All these would clearly establish that the rebuttable presumption, contemplated under the Act, as decided by the Supreme Court in MMTC Ltd. and another Vs. M/s Medchl Chemicals & Pharma (P) Ltd and another reported in 2001 (4) CTC 749, has not been established. Therefore, I have no hesitation to hold that a direction to stop payment has been given since he had no liability to pay the amount and subsequently, the offence under Section 138 Negotiable Instruments Act is made out. Accordingly, I uphold the judgments of the courts below and dismiss this revision. This revision petition is dismissed. Bail bonds if any, shall stand cancelled. The court below is directed to secure the custody of the petitioner and commit him back to prison to serve out the rest of imprisonment imposed on him.