Complainant appealed against acquittal reversing conviction for cheque dishonour under Section 138 NI Act. The High Court found the complainant failed to prove financial capacity and that presumption under Section 139 stood rebutted by preponderance of probabilities, and dismissed the appeal confirming the acquittal.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
Crl.A.No.634 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 18-03-2025
CORAM:
THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP
Criminal Appeal No. 634 of 2017
K. Anbalagan
.. Appellant
Versus
Venkataraman .. Respondent
Criminal Appeal is filed under Section 378 of Cr.P.C against the Judgment dated 04.04.2016 passed in Criminal Appeal No.263 of 2011 on the file of the learned I Additional District Judge, Vellore.
For Appellant : Mr. S. Namasivayam For Respondents : Mr. S. Paneerselvam
J U D G M E N T
This Criminal Appeal is filed against by the Complainant against the Judgment of acquittal dated 04.04.2016 passed in Criminal Appeal No.263 of 2011 on the file of the learned I Additional District Judge, Vellore, overturning the Judgment of conviction recorded in the Judgment dated 22.11.2011 passed in Calendar Case No. 781 of 2005 on the file of the Judicial Magistrate No.IV, Vellore.
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2.1. The Complainant is the brother in law of the Accused, who had married the sister of the Accused. The Complainant is running a photo frame shop in Vellore. Apart from the photo frame shop, he is also involved in real estate business. On 01.05.2003, the Accused, met the Complainant in his photo frame shop and requested to help him to meet his urgent business commitment. On 01.05.2003 the Complainant alleged to have paid Rs.2,00,000/- which he was having in his shop. That apart, he has also entrusted to the Accused 30 sovereigns of gold jewels of his wife, worth Rs.95,000/- kept in his shop. On receipt of the cash as well as jewels, the Accused assured the Complainant to repay the same within six months. However, even after six months, the Accused did not repay the amount of Rs.2 lakhs or returned the jewels. After repeated demands, the Accused informed the Complainant that he did not redeem the jewels he pledged and therefore, the Accused himself calculated the value of 30 sovereigns of jewels at Rs.95,000/- and issued the cheque for Rs.2,95,000/- on 27.04.2005 in favour of the Complainant drawn on Big Kancheepuram Co-operative Town Bank Limited, Kancheepuram. When the Complainant presented the cheque for collection with his bankers namely Bank of Baroda, Vellore on 27.04.2005, it was dishonoured on 28.04.2005 and
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returned with a memo that there was no sufficient funds to honour the cheque in the bank account of the Accused. Therefore, on 18.05.2005 the Complainant issued a lawyer notice calling upon the Accused to repay the cheque amount for which the Accused issued a reply notice on 01.06.2005 repudiating the averments in the notice. Thereafter, the Complainant has filed the complaint under Section 138 of The Negotiable Instruments Act.
2.2 The sworn statement of the Complainant was recorded by the learned Judicial Magistrate-IV, Vellore and on perusal of the documents accompanying the private complaint, the learned Judicial Magistrate-IV Vellore concluded that a prima facie case under 138 of the Negotiable Instruments Act is made out. Therefore, the private complaint was taken on file as C.C.No.781 of 2005 and summons were issued to the Accused under Section 204 Cr.P.C along with copy of the complaint. On receipt of the summons, the Accused appeared before the learned Judicial Magistrate-IV, Vellore. The Accused was questioned by the learned Judicial Magistrate-IV Vellore regarding the offence. The Accused denied having committed any offence. Therefore, trial was ordered.
2.3. During trial, the Complainant examined himself as P.W-1 and marked Ex.P-1 to Ex.P-10. One Karthikeyan, a friend of the Complainant was examined as P.W-2 who witnessed the handing over of the amount of
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Rs.2,00,000/- and 30 sovereigns of gold jewels to the Accused by the Complainant at his shop. The Manager of Bank of Baroda, Vellore Branch was Examined as PW4. One Sivasankaran was examined as P.W-5. The cheque bearing No.J046023 drawn in Big Kancheepuram Town Co-operative Bank by the Accused in favour of the Complainant was marked as Ex.P-1. Ex.P-2 is the pay in slip. Ex.P-3 is the return memo from the Big Kancheepuram Cooperative Bank. Ex.P-4 is the collection charge for Rs.500/-. Ex.P-5 is the lawyers notice issued on behalf of the Complainant. Ex.P-6 is the acknowledgement for receipt of the lawyers notice. Ex.P-7 is the reply notice issued on behalf of the Accused. Ex.P-8 is the invitation of the house warming ceremony of the Complainant. Ex.P-9 are the photos and negatives taken on the event of house warming ceremony of the Complainant. Ex.P-10 is the Statement of account maintained with Big Town Kancheepuram Co-operative Bank in the name of the Accused. On behalf of the Accused, One Chinnathurai, the Assistant of the Office of the District Collector, Kancheepuram was examined as D.W-1. One Balaji was examined as D.W-2 who is the Manager of Bank of Baroda Branch. One Thahira, Head Clerk of Judicial Magistrate-IV was examined as D.W-3.
2.4. After hearing the arguments of the learned Counsel for the Complainant and the learned Counsel for the Accused and upon appreciation
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of oral and documentary evidence, the learned Judicial Magistrate-IV, Vellore, convicted the Accused for the offence under Section 138 of Negotiable Instruments Act and sentenced him to undergo three months simple imprisonment and to pay compensation of Rs,4,00,000/- to the Complainant.
2.5 Aggrieved by the judgment of conviction recorded by the learned Judicial Magistrate-IV, Vellore in C.C. No. 781 of 2005, the Accused preferred the Appeal before the learned Principal District and Sessions Judge, Vellore in Crl.A. No. 263 of 2011. After hearing the argument of the learned Counsel for the Appellant and the learned Counsel for the Respondent/Complainant, the learned I Additional District and Sessions Judge, Vellore by judgment dated 04.04.2016 in C.A. No. 263 of 2011 allowed the Appeal and set aside the judgment of conviction recorded by the learned Judicial Magistrate-IV Vellore in C.C.No.781 of 2005.
2.6 Aggrieved by the judgment of acquittal recorded by the learned I Additional District and Sessions Judge, Vellore in C.A. No. 263 of 2011 dated 04.04.2016, the Complainant has filed this Appeal, seeking to set aside the Judgment of acquittal passed by the Appellate Court.
Respondent herein is none other than his brother in law. The Complainant had
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extended loan of Rs.2,00,000/- in cash and entrusted 30 sovereigns of gold jewels, which is equivalent to Rs.95,000/- on the request of the Accused to meet his urgent business commitments. The Accused has not disputed the signature in the cheque. He had not cross-examined the Complainant as PW-1. Based on the evidence of the Complainant, the learned Judicial Magistrate-IV, Vellore had rightly convicted the Accused and sentenced him to undergo three months of simple imprisonment and awarded Rs.4,00,000/- as compensation under Section 357 of Cr.P.C. However, the judgment of conviction was set aside by the Appellate Court, without any acceptable reasons.
the learned Judicial Magistrate-IV Vellore had not properly assessed the evidence but recorded the Judgment of conviction based on presumptions by stating that the signature in the cheque under Ex.P-1 was not denied by the Accused/respondent herein. The learned Judicial Magistrate-IV failed to consider the materials available in the evidence of the prosecution witness P.W-1 to P.W-3. Whereas the learned I Additional District and Sessions Judge, Vellore on the same set of evidence considered the entire materials including the materials available in the cross examination of P.W-1 and P.W-2 and the evidence available through D.W-1 to D.W-3. The most important
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aspect in this case is that the Complainant did not have the wherewithal to extend loan of Rs.2,00,000/-. The Accused is running a cinema theatre in Kancheepuram and he does not need any financial help from the Complainant. The Accused is a resident of Kancheepuram. He is residing temporarily in Vellore for the education of his children. It is alleged by the Complainant that on 01.05.2003 all Organisations had to close on May Day which is celebrated in recognition of the rights of the labourers. If any shop or establishment is kept open on 01st May of any year, it is treated as offence under the Labour Act and penalty will be imposed by the respective labour Inspectors. This was ignored by the learned Judicial Magistrate-IV Vellore. It is the defense of the Accused that there was a family dispute among the members of the family after the death of the father of the Accused. The Accused is managing and administrating his cinema theatre and maintaining his accounts in Kancheepuram Central Co-operative Bank. The cheque leaves are always maintained in his house which includes signed blank cheque. One of the cheques signed by the Accused was surreptitiously removed by the wife of the Complainant/sister of the Accused. The sister of the Accused was demanding a share in the property left by their father but it was refused by the Accused. In this regard, litigations are pending between the family members and they are not in talking terms, which was also elicited in cross examination.
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Therefore the circumstances leading to the claim of the Complainant that the Accused came to his photo frame shop and sought urgent help to protect his name and fame and reputation in his business is untrue. The entire case has been falsely portrayed against the Accused. The learned Judicial MagistrateIV mechanically convicted the Accused based on presumptions. However, the learned I Additional District and sessions Judge considered the entire cross examination of the prosecution witnesses and dismissed the complaint and acquitted the Accused. The judgment of the learned I Additional District and Sessions Judge is a well reasoned judgment and it does not warrant any interference by this Court. Therefore, the learned Counsel for the Respondent sought dismissal of the Appeal.
Point for consideration
Whether the judgment of acquittal recorded by the learned I Additional District and Sessions Judge in C.A.No.263 of 2011 dated 04.04.2016 is to be set aside and the judgment of the learned Judicial Magistrate-IV in C.C.No.781 of 2005 dated 22.11.2011 is to be restored?
Appellant as well as Thiru. S. Paneerselvam, learned Counsel for the
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Respondent. Perused the records and judgment in C.C. No. 781 of2005 on the file of the learned Judicial Magistrate-IV, Vellore as well as the judgment of the learned I Additional District and Sessions Judge, Vellore in Crl. A. No. 263 of 2011 dated 04.04.2016.
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was dispute among the members of the family of the Accused after the death of the father of the Accused over the claim of share in the properties and therefore, the Accused is not in talking terms with the sister of the Accused/wife of the Complainant is very much available on record. In the cross examination the wife of the Complainant admitted that the allegation that they are not in talking terms is not correct. It was stated that the Accused attended the house warming ceremony for which the invitation card was marked as Ex.P-8 and photograph showing the Accused and the Complainant and the Complainant wife as Ex.P-9 series. Thus, it is stated that the Accused attended the house warming ceremony of the Complainant. P.W-1 also admitted that his wife died and on the death of the wife of the Complainant, the Accused attended the funeral. In the cross examination, the Complainant as P.W-1 had clearly admitted that he had not furnished any document as proof of the claim that he had handed over Rs.2,00,000/- in cash and 30 sovereigns of gold jewellery to the Accused on 01.05.2003. Also he had clearly admitted that he had not furnished the statement of accounts from his Bank account maintained with Bank of Baroda, Vellore Branch. The claim by the Accused that the Complainant does not have the wherewithal to handover such huge amount at short notice is presumed to be acceptable. In such a circumstances the Complainant ought to have furnished his Bank account as proof of the
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claim that he was resourceful enough at all time to extent such a loan at short notice. In the absence of production of statement of accounts of his Bank Account with Bank of Baroda, the claim of the Complainant cannot be accepted.
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This is strange, unbelievable and it cannot be accepted.
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attended the house warming ceremony of the Complainant. Merely because the Accused participated in the house warming ceremony of the Complainant will not be a ground to say that there was no dispute at all between the Accused and the Complainant. This is part of the culture existing in our society where the brother will not give up his duty to attend the function of his sister, notwithstanding any surviving dispute.
good terms.
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name of the Balaji Theatre. The Accounts thereof are maintained with the Kancheepuram Co-operative Bank. The Balaji Theatre, Kancheepuram belongs to the family to the Accused which was run by his father. After the death of the father, the business was taken over by the Accused. In the reply notice it was also specifically stated that the Complainant is not having sufficient amount to help the Accused at such a short notice. Here again, to disprove such claim the Complainant ought to have furnished Bank details maintained by him with the Bank of Baroda Vellore Branch, but he had not done so. Therefore, the Court has to necessarily draw adverse inference against the Complainant that he does not have resources to extend such huge amount as loan to the Accused. The presumption under Section 139 of The Negotiable Instruments Act is a rebuttable presumption, which was successfully rebutted by the Accused in this case. In such event, the Accused cannot be convicted. At the earliest point of time, before filing of the complaint, the Accused in his reply notice had challenged the resourcefullness of his brother-in-law to extend such loan. By preponderance of probabilities, the Accused had created a cloud in the claim of the Complainant.
12. As per the reported ruling in the case of Rangappa vs Sri Mohan
reported in 2010(11) SCC 441 , it was held that the Accused need not enter the
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witness box. The Accused by letting in oral or documentary evidence can create doubt in the mind of the Court on the claim of the Complainant regarding the presumption available under Sections 139 of Negotiable Instruments Act by the preponderance of probabilities. Only if the Complainant is able to establish the presumptions under Section 138 of Negotiable Instruments Act, the burden shifts on the Accused. From the documents under Ex.P-1 to Ex.P-5, the Complainant cannot be considered to have raised a presumption under Section 138 of the Negotiable Instruments Act.
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answered against the Appellant and in favour of the Respondent. The judgment of acquittal recorded by the learned I Additional District and Sessions Judge, Vellore in C.A.No.263 of 2011, dated 04.04.2016 is found proper which does not warrant any interference by this Court.
In the result, this Criminal Appeal is dismissed as having no merits. the Judgment dated 04.04.2016 passed in Criminal Appeal No.263 of 2011 on the file of the learned I Additional District Judge, Vellore is confirmed.
18.03.2025
shl Internet : Yes/No Index : Yes/No Speaking/Non-speaking order Neutral Citation : Yes/No
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To
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SATHI KUMAR SUKUMARA KURUP, J
shl
Judgment made in Crl.A. No. 634 of 2017
18.03.2025
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1 issue framed by the court
Whether the acquittal in appeal was to be set aside and the Magistrate's conviction under Section 138 NI Act restored?
Colour shows how this judgement treated each authority
Rangappa vs Sri MohanRelied on¶12
2010(11) SCC 441 · Who else cites this
5 provisions across 2 enactments
K. Anbalagan
Venkataraman
Sathi Kumar Sukumara Kurup
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
