w w w . L a w y e r S e r v i c e s . i n


M/S. Fashion Gate International by its Partner Dharmalingam, Tiruppur & Another v/s K. Chidambaram

    Crl.R.C. No. 1051 of 2017
    Decided On, 08 September 2022
    At, High Court of Judicature at Madras
    By, THE HONOURABLE MR. JUSTICE SUNDER MOHAN
    For the Petitioners: N. Manokaran, Advocate. For the Respondent: K.R. Arun Shabari, Advocate.


Judgment Text
(Prayer: Criminal Revision has been filed under Sections 397 and 401 Crl.P.C., to set aside the conviction imposed in the judgment dated 16.06.2017 made in C.A.No.48 of 2016 on the file of the learned First Additional District and Sessions Court, Tiruppur confirming the judgment dated 13.04.2016 made in C.C.No.1 of 2014 on the file of the learned Judicial Magistrate, Fast Track Court, Tiruppur.)

1. This revision arises against the Judgment of the learned First Additional District and Sessions Judge, Tiruppur, passed in C.A.No.48/2016 on 16.06.2017.

2. The petitioners faced prosecution for the offence under Section 138 of the Negotiable Instruments Act in C.C.No.1/2014 on the file of the learned Judicial Magistrate, Fast Track Court, Tiruppur along with the second petitioner's mother. The prosecution case was that the second petitioner had borrowed a sum of Rs.9,00,000/- (Rupees Nine Lakhs only) from the respondent/complainant on 28.06.2012 to meet his family and business expenses. Towards discharge of the said debt, the second petitioner issued a post dated cheque of the first petitioner's Firm drawn on Allahabad Bank, Tiruppur in a sum of Rs.9,00,000/- (Rupees Nine Lakhs only). The second petitioner also executed a promisory note for the said sum of Rs.9,00,000/- (Rupees Nine Lakhs only). The respondent/complainant presented the cheque for collection on 30.01.2013 and upon the same having returned for the reason "Opening Balance Funds Insufficient", issued statutory notice and filed a complaint under Section 138 of the Negotiable Instruments Act.

3. Before the trial Court, the respondent examined two witnesses and marked seven exhibits. The petitioners did not examine any witnesses or mark exhibits on their side.

4. The trial Court rendered a finding of conviction and sentenced the first petitioner to pay a fine of Rs.1000/- and directed the second petitioner to pay the said fine on behalf of the first petitioner and in default the second petitioner to suffer one month S.I and sentenced the second petitioner to undergo one year S.I and to pay a fine of Rs.1,000/- (Rupees One Thousand only), in default to suffer one month S.I. Against the same, the petitioners moved an Appeal in C.A.No.48/2016, which came to be dismissed by the learned I Additional District and Sessions Judge, Tiruppur.

5. Heard, Mr.N.Manokaran, learned counsel for the Petitioners and Mr.K.R.Arun Shabari, learned counsel for the Respondent.

6. The learned counsel for the Petitioners submitted that the judgement of the Courts, below convicting the Petitioners, has to be set aside. The learned counsel submitted that the statutory notice was not sent to the petitioners and hence there was no cause of action for filing the impugned complaint. In the Notice, the cheque number was shown as 155175. In the complaint, the cheque number was shown as 055175. The said discrepancy is fatal to the respondent’s case, since the petitioner was not put on notice, as to which cheque was dishonoured. The case of the respondent is that the petitioners had executed a pronote and also issued a cheque for the alleged loan received by the Petitioners. The Respondent did not examine all the witnesses to the Pronote to establish the liability. He had examined only P.W.2 who is none other than the sister of the respondent. The Court has to draw adverse inference against the respondent since he had not examined the other independent witnesses to the Pronote. The Respondent had not established his financial capacity to lend a huge sum of Rs.9,00,000/- (Rupees Nine Lakhs only) to the Petitioner. In the statutory notice, the Respondent had mentioned that only the second Petitioner approached the Respondent for loan. In the complaint, the Respondent mentioned that both the second Petitioner and his mother one Rasammal who was originally arrayed as A3 approached the complainant for loan. This contradiction is a material one, and would affect the case of the Respondent. The learned counsel hence submitted that the Courts below have not considered any of the legal submissions raised by the petitioner and brushed aside the same. The findings of the Courts below calls for inference by this Court. The learned Counsel for the Petitioner relied upon the following judgements in support of his submissions:-

1.Mohamad Irfan vs. Velukannan reported in MANU/TN/3604/2016. 2.An unreported judgement of this Court in Crl.O.P.No.2148 of 2019 and C.M.P.Nos.1356 and 1357 of 2019 in S.R.Lakshmi Narayanan vs. C.Nandan and another . 3. Poppys Spinning Mills (P) Ltd vs. C.Visalakshi reported in 2005 (1) CTC 677 4.M.S.Narayana Menon vs. State of Kerala reported in (2006) 6 SCC 39 5.Basalingappa vs. Mudibasappa repored in (2019) 5 SCC 418. 6.John K.Abraham vs.Simon C.Abraham and another reported in (2014) 2 SCC 236.

7. The learned counsel for the Respondent submitted that the scope of revision is limited and this Court cannot interfere with the concurrent findings of the fact unless the petitioner is able to show perversity in the findings. The Courts below have correctly appreciated the facts and law and, hence their findings are not perverse. The learned counsel for the respondent submitted that the notice issued to the petitioners was sent to their last known address. The Apex Court had held in several decisions that when a notice is issued to the last known address, even if it is returned unserved it is deemed to be valid notice under section 138 of Negotiable Instruments Act. The discrepancy in the number of the cheque is a typographical error which was rectified in the complaint filed by the Respondent. Further under section 138 of the N.I.Act, there is no requirement for mentioning the number of cheque in the statutory notice. The Respondent has given fifteen days notice calling upon the petitioner to pay the cheque amount which is only the requirement under Section 138(b) of N.I. Act. In any event, no prejudice has been caused to the petitioner because of the discrepancy in the number of the cheque. The learned counsel submitted that the alleged contradiction in the notice and the complaint with regard to who approached the Respondent for loan is inconsequential in the present proceedings, since the mother of the second accused who was originally arrayed as A3 has been acquitted by the Courts below. That apart, the said contradiction would not affect the issue as to whether the Petitioners are liable to make payment to the Respondent. The learned counsel also submitted that the non examination of the witnesses to the Pronote executed by the Petitioner is not fatal to the Respondent’s case. The Respondent had examined one witness to the Pronote. In a prosecution under Section 138 of NI Act, there is a statutory presumption under Section 139 of NI Act and the petitioners have not rebutted the statutory presumption. The learned counsel for the respondent relied upon the following judgements in support of his submissions:

1. An unreported judgement of this Court in Crl.O.P.No.609 of 2018 and Crl.M.P.No.188 of 2018. 2. An unreported judgement of this Court in Crl.A.Nos.1233-1235 of 2022. 3.Bir Singh vs. Mukesh Kumar reported in (2019) 4 SCC 197. 4. Kavuri Suwarna Bala Sundaram vs. Karmati Poorna Chandra Rao and another reported in 2003 SCC online AP 1266

8. This Court has given its anxious consideration to the rival contentions made by learned counsels on either side. The learned counsel for the petitioners’ main submission is that the notice was defective as it contained a wrong cheque number. He relied upon the following observations of this Court in Mohammad Irfan versus Velukannan reported in MANU/TN/3604/2016.

“…

37. Be that as it may, in the instant case, even though the Appellant/Complainant at paragraphs 8 and 12 in the complaint, had mentioned be cheque number as ‘361868’ and mentioned the cheque number incorrectly as ‘361838’ inEx. P3 – Notice, this Court is of the considered view that there is no mist or cloud or shroud or any manner of simmering doubt in regard to the language employed in section 138 of the Negotiable Instruments Act. Admittedly, notice will have to be read in entirety. In the present case, there was no correction notice communicated/ issued on behalf of the Appellant/Complainant to the Respondent/Accused. Also considering the fact that the supply of chickens by the Appellant/Complainant to the Respondent/Accused is a running transaction, the mistake that had occurred in Ex.P3 - Notice pertaining to the cheque number cannot be said to be an ancillary/ incidental or irrelevant/immaterial one, because of the fact that the issuance of cheque -Ex.P1 was not the only one transaction between the parties. Certainly the incorrect mentioning of the check in Ex.P3 -Notice is not fulfilling the requirement under section 138 (b) of the Negotiable Instrument Act. In as much as Ex.P3 - Notice is not in conformity with Ex.P1 - Cheque as a logical corollary, the complaint filed by the Appellant/Complainant is Per se not maintainable in law.”

This Court is of the view that the above judgement may not be applicable to the facts of the instant case. This Court in that case, was considering a case of discrepancy in the cheque number when there was a running account between the complainant and the accused and there were several transactions between them. In that context, this Court held that incorrect mentioning of the cheque number would not fulfil the requirement under section 138 of the Negotiable Instruments Act. Whereas, in this case it is a singular transaction between the Petitioners and the Respondent, and the petitioner could not have been misled.

9. The learned counsel for the petitioners relied upon another unreported judgment of this Court in S.R.Lakshmi Narayanan vs. C.Nandan and another in Crl.O.P.No.2148 of 2019 and Crl.M.P.Nos.1356 and 1357 of 2019. This Court had quashed the complaint under Section 138 of N.I. Act, since the notice contained wrong cheque number and wrong cheque amount. The relevant observations are as follows:-

“…

3…Whereas, when the complaint is filed, in paragraph 5 of the complaint, it is stated as,

“In the said notice dated 10.09.2018 the amount for the cheque dated 16.06.2018 was wrongly referred as “Rs.1,42,189/- instead of Rs.”1,40,688/- and also instead of Cheque No. “743630” “743640” was mentioned.”

4. Therefore, the statutory notice itself is defective. In the statutory notice, different Cheque Number and different amount is entered. Whereas in the complaint, its defect is accepted and instead a correct cheque number and correct amount is given. The cause of action for filing a Criminal Complaint under Section 138 of Negotiable Instruments Act and regarding Company, Section 142 is also to be followed. Also part of the cause of action is the statutory notice. When the statutory notice itself is defective, in continuation of the said defective notice, the Criminal complaint itself is not maintainable.”...

This Judgement is also not applicable to the facts of the instant case, The facts are not similar. The notice contained the wrong cheque amount as well. It is settled law that the demand of the cheque amount must be proper. In such circumstances, this Court quashed the complaint.

10. The learned counsel for the Respondent relied upon an unreported judgement of this Court in Crl.O.P.No.609 of 2018 in Sai Infra Equipment’s Private Limited and another vs. L&W Construction Private Limited. The facts in that case is that instead of mentioning the cheque number, the account number was mentioned as cheque number. This Court held that the notice did not suffer from any infirmity and mere mistake in the cheque number by itself would not vitiate the complaint. The learned judge after referring to the judgements of other High Courts held as follows: `

“18. A careful reading of the above judgments would show that a mere mistake in the cheque numbers, by itself will not vitiate the complaints, if there is a proper demand for the cheque amount made in the statutory notice. This Court is in complete agreement with the above two decisions.”

This Court is in respectful agreement with the aforesaid view.

11. That apart, this Court finds that the Andhra Pradesh High Court in Kavuri Suwarna Bala Sundaram vs. Karmati Poorna Chandra Rao and another reported in 2003 SSC online AP 1266 has held as follows:

“...

When Section 138 of the Act contemplates only the amount covered by the dishonoured cheque, but not its number, being mentioned in the notice contemplated by that section, it is not necessary for the drawer to mention that the number of the cheque, for the drawer to comply with the demand made in the notice, because the drawer shall have fifteen days time to comply with the demand made and the drawer can easily find out from his bank, within that time which out of the several cheques issued by him was dishonoured. Infact, the number on the dishonoured cheque is of no relevence for the drawer to pay the amount covered by such dishonoured cheque. Therefore, mentioning of the number of the dishonoured cheque is wholly unneccessary and irrelevant in a proceeding under Section 138 of the Act. In view, there of the fact that there is a variation in the number of cheque mentioned in the notice of dishonour and in the body of the complaint and the cheque that is filed into Court is of no sequence when in the notice of demand the amount covered by the dishonoured cheque is correctly mentioned. So, merely on the ground that wrong number of the dishonoured is mentioned in the notice under Section 138 of the Act and the complaint, the complaint cannot be quashed.”

This Court is in agreement with the above view taken by the Andhra Pradesh High Court. Therefore, this Court is of the view that discrepancy in the cheque number in the facts of the instant case does not affect the Respondent’s case in any manner.

12. That apart, admittedly the Petitioners had not received the statutory notice, and hence, he cannot complain that he was misled. No prejudice has been caused to them on account of the mistake in the cheque number. The object of Section 138 of NI Act is to give an opportunity to the accused to make payment before initiating the complaint. The Respondent has mentioned the correct cheque number in the complaint filed under Section 138 of Negotiable Instruments Act. The Petitioner had opportunity to rebut the presumption u/s 139 of the Negotiable Instruments Act before the Trial Court.

13. The next submission of the learned counsel for the petitioners is that notice was not issued to the correct address and address shown in the Pronote differs from the address found in the statutory notice. The learned counsel for the petitioners has not established the fact that there is difference in the address found in the Pronote and in the statutory notice. This Court finds that the notice has been sent to the last known address of the petitioners and this issue had been addressed by the Courts below. It is well settled that notice sent to the last known address, is deemed service of notice, even if the notice has been returned unserved. The judgement of the Apex Court in Ajeet Seeds Limited vs. K.Gopala Krishnaiah reported in (2014) 12 SSC 685 reiterates this principle of law.

14. The other submission of the learned counsel for the Petitioners is that there is contradiction between the notice and the complaint with regard to who approached the Respondent for taking the loan. According to him, the Respondent has deliberately included the third accused, the mother of the second petitioner herein in the complaint and made false averments that she also approached the Respondent for loan. This Court finds that the Courts below have addressed this issue and found that the respondent did not establish the case as against A3. The said contradiction alone may not be enough to rebut the presumption under 139 of NI Act.

15. The learned counsel for the Petitioner submitted that adverse inference has to be drawn since the Respondent did not examine the witnesses to the Pronote. The execution of the Pronote is incidental in a case under Section 138 of the N.I.Act. No adverse inference can be drawn merely because

Please Login To View The Full Judgment!
the witnesses to the Pronote have not been examined. The Petitioners have neither let in evidence nor improbablised the respondent's case in the cross examination, to rebut the statutory presumption. This Court finds that the defence of the Petitioners is that they had issued the cheque and executed Pronote in favour of one Mr.Paramasivam who said to be the employee of the Respondent to secure a loan of Rs.1,00,000/- (Rupees One Lakh only) taken from him. Their further case was that the second Petitioner had discharged the loan taken from Mr.Paramasivam. However, the said Mr.Paramasivam did not hand over the blank cheque or the Pronote and misused the said cheques through the Respondent herein. We find that this defence is unacceptable as the second petitioner has not given any complaint or taken steps to recover these two documents from Mr.Paramasivam. That apart, no documents have been produced to establish the alleged loan transaction with Mr.Paramasivam. Further the second petitioner has not given any letter to the Bank for “stop payment” of the cheque. 16. This Court therefore finds no infirmity in the findings of the Courts below. 17. Before parting with this case, this Court finds that the Courts below have committed error as regards to the sentence imposed on the first Respondent. The Trial Court imposed a fine of Rs.1000/- (Rupees One Thousand only) to the first Petitioner This is in accordance with law. The further direction that the fine must be paid by the representative of the Firm and that he should sufffer default sentence for non payment of fine is not in accordance with law. The representative of the Firm cannot be made liable for any sentence of fine imposed on the Firm. 18. For the foregoing reasons, Criminal Revision is dismissed, with the above observations.
O R