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Kothai Finance v. Chinnasamy - C.A.No.196 of 1996 [2003] RD-TN 597 (25 July 2003)


DATED: 25/07/2003



C.A.No.196 of 1996

Kothai Finance

rep. by its Partner


No.55, Park Road

Tiruppur. .. Appellant -Vs-

Chinnasamy .. Respondent This criminal appeal is preferred under Sec.378(4) of The Code of Criminal Procedure against the judgment of the I Additional Sessions Judge, Coimbatore passed in C.A.No.97 of 1994 dated 1.2.1996 reversing the judgment of the Judicial Magistrate No.2, Tiruppur made in C.C. No.43/94 dated 21.9.94.

For Appellant : Mr.K.Kalyana Sundaram

For Respondent : Mr.L.Chandrakumar


A judgment of acquittal made by the learned I Additional Sessions Judge, Coimbatore in a criminal appeal which arose from an order of conviction by the trial Court namely Judicial Magistrate, Tiruppur in a complaint under Sec.138 of The Negotiable Instruments Act, is under challenge.

2. The appellant before this Court filed a complaint under Sec.138 of the N.I. Act with the following facts:

The respondent who was originally the accused before the trial Court, had money transactions with the complainant, and in that way he owed Rs.70,000/-. He issued Ex.P1 cheque dated 21.4.93 drawn on Indian Bank, Rasipuram. The complainant sent the same for collection on 26.4.93 through its Bank namely Lakshmi Vilas Bank, Tiruppur, and the same was dishonoured and returned with the endorsement "exceeds arrangement". The complainant issued a notice on 12.5.93 under Ex.P3. On receipt of the said notice, the accused made a request to wait for some time and present the same again on 21.6.1993. Accordingly, the said cheque was presented for the second time on 21.6.93, and the same was dishonoured and returned as on the earlier occasion. Again the complainant issued another notice under Ex.P2 on 3.7.93, which was returned, and hence, the complainant was constrained to file the complaint under Ss 138 and 142 of the N.I. Act.

3. After following the procedural formalities, the trial Court tried the complaint. On the side of the complainant P.Ws.1 to 3 were examined, and Exs.P1 to P5 were marked. After evidence of the complainant was over, the accused was questioned under Sec.313 of Cr.P.C. as to the incriminating circumstances found in the evidence of the complainant witnesses. The accused examined himself as D.W.1, and Exs.D1 to D5 were marked. The trial Court on consideration of the materials available and hearing the rival submissions found the accused guilty and convicted him under Sec.138 of the Negotiable Instruments Act and sentenced him to undergo R.I. for one year and to pay a fine of Rs.2,000/- and in default of payment of fine to undergo S.I. for 6 months. Aggrieved accused preferred an appeal before the Sessions Division, Coimbatore, wherein the learned I Additional Sessions Judge after consideration of the submissions and scrutiny of materials reversed the judgment of the trial Court and acquitted the accused. Hence, the complainant has brought forth this appeal.

4. Advancing his arguments on behalf of the appellant/complainant, the learned Counsel interalia would submit that the complainant was represented by its Managing Partner; that by sufficient and satisfactory evidence, the complainant has proved its case; that there are money transactions; that the respondent/accused was liable to pay Rs.70,00 0/- towards which he issued Ex.P1 cheque on 21.4.93 drawn on Indian Bank, Rasipuram; that the complainant has examined the Officials from the Bank to prove that on both occasions the cheque was bounced with the endorsement "exceeds arrangement"; that two times notices were issued; that it is true that after the issue of the first notice, which was served on the respondent/accused, proceedings are not initiated only because of his request; that in view of his request, the cheque was again placed in the hands of the Bank for collection for the second time, and then also, the same was dishonoured with the same endorsement; that after issuing the statutory notice on 3.7.93, the complainant has filed the complaint in time, and under such circumstances, the trial Court took the correct view in finding the respondent guilty and convicted him, but the Sessions Court on appeal by the accused has reversed the judgment of the trial Court on the grounds which had no legal basis; that while the signature of the accused in Ex.P1 was an admitted fact, the lower appellate Court should have drawn the presumption available under Sec.138 of the N.I. Act, but it has not done so; that apart from that, the lower appellate Court has given unnecessary and undue importance to the documents filed by the accused and has stated that there were circumstances to show that Ex.P1 cheque was not supported by consideration; that the lower appellate Court has also held that it was not a case which would attract the provisions of Sec.138 of the N.I. Act; that the first appellate Court was not correct in stating that immediately after the period found in the first notice was over, the proceedings should have been initiated and since it was not done so, the same was fatal to the complainant's case and hence, the case should be dismissed; that it remains to be stated that the complainant waited despite the service of the first notice only on the request of the accused, and he placed Ex.P1 cheque for collection for the second time that was also on the request of the accused, and under such circumstances, the accused should not be permitted to say that the complaint itself was not filed within the stipulated time as expected in law; that the Sessions Court has not taken into consideration the said fact, and hence, in view of the available evidence, which is sufficient and satisfactory, the judgment of the trial Court has got to be restored.

5. Strongly opposing all the contentions put forth by the appellant's side, the learned Counsel for the respondent would submit that the trial Court without proper appreciation of the evidence available found the respondent/accused guilty; that when it was appealed against, the Sessions Court after elaborately discussing the reasons has found that it was not a fit case which would attract the provisions of Sec.138 of the N.I. Act, and hence, the judgment of the Sessions Court has got to be confirmed, and the appeal be dismissed.

6. After careful analysis of the materials available and the consideration of the rival submissions, this Court is of the considered view that the judgment by the learned Sessions Judge has got to be affirmed.

7. The complainant who is the appellant herein, filed a complaint stating that in view of the financial transactions between the parties, the respondent/accused owed Rs.70,000/- in respect of which he issued a cheque on 21.4.93 marked as Ex.P1. Ex.P1 cheque drawn on Indian Bank, Rasipuram was sent for collection by the complainant on 26.4.93 through Lakshmi Vilas Bank, Tiruppur. The same was returned with the endorsement "exceeds arrangement". It is an admitted fact that the appellant/complainant issued Ex.P3 notice on 12.5.93, and the same was also served on the respondent/accused. Despite service, no payments were made to the complainant. Again the same cheque was placed for collection on 21.6.93, and that time also, the same was dishonoured with the same endorsement. The complainant gave the second notice on 3.7.93, which was also marked before the trial Court as Ex.P2. A perusal of the first notice issued by the complainant on 12.5.93 would indicate that it contained all the necessary particulars and called upon the accused to make the payment. The said notice has also been served on the respondent/accused. In such circumstances, a complaint on the default of the payment, within the stipulated period in law should have been filed, but the complainant has failed to do so. The complainant has followed his own course by issuing a second notice on 21.6.93 as evident from Ex.P2. The reason adduced by the complainant that he was waiting on the request of the accused and he placed the cheque for collection for the second time on 21.6.93 has got to be discountenanced. This explanation tendered by the complainant was flimsy, and it was made to circumvent the strict provision of law under Sec.138 of the N.I. Act, and thus, the complainant desired to call the second notice as a statutory notice. The Court is unable to see why not the first notice issued on 12.5.93 cannot be called so. Having failed to initiate the proceedings within the stipulated time, the complainant who lost the cause of action, has filed the complaint according to his convenience. In order to save time and to adduce the reasons he has issued the second notice calling it as statutory notice, and hence, on that ground alone the complaint of the complainant deserves a rejection by the Court.

8. Secondly, as rightly pointed out by the learned Sessions Judge, the presumption enshrined under Sec.138 of the N.I. Act was a rebuttable one. In the instant case, the accused has filed Exs.D1 to D5. The learned Sessions Judge has elaborately discussed the contents of those documents and all the circumstances, which would be indicating that the complainant firm along with the partners were bent upon creating mounting pressure upon the accused to pay the money without approaching the Civil Court. Even after filing of those documents, the complainant did not come forward to produce accounts to convince the trial Court, though it was a registered firm dealing in finance. It is true that Ex.P1 cheque bore the signature of the respondent/accused. But by adducing sufficient proof, the accused has rebutted the presumption what is present under Sec.138 of the N.I. Act, and thus, the lower appellate Court was perfectly correct in coming to the conclusion that the accused cannot be found guilty under Sec.138 of the N.I. Act both legally and factually. Therefore, without any hesitation, the judgment of the Sessions Court has got to be affirmed.

9. In the result, this criminal appeal fails, and the same is dismissed, confirming the judgment of the lower appellate Court. Index: Yes

Internet: Yes


1) The Judicial Magistrate No.II, Tiruppur.

2) The I Additional Sessions Judge, Coimbatore.

3) The Principal Sessions Judge, Coimbatore.



Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites


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