Dismissed¶41

Adithya v. Kiran

Madras HC2 Jul 2025CRL A/760/2025

Case brief

AI extract

What is this about?

Section 138 Negotiable Instruments Act; stop payment by drawer; sufficient funds available on date of presentation; cheque Ex.P1 dishonoured; statement of accounts Ex.D32; duplicate/defective goods defence; reply notice dated 14.07.2022; counter-demand Rs.16,28,400/- with 18% interest; invoice dues Rs.4,60,389/-; acquittal upheld; no infirmity or illegality; criminal appeal dismissed; Crl.A.No.760 of 2025; STC No.344 of 2022; Fast Track Court No.I Judicial Magistrate Coimbatore; Section 419(4) Bharatiya Nagarik Suraksha Sanhita 2023; High Court of Judicature at Madras; G.K. Ilanthiraiyan J.; SMR Electronics v. Indus Technologies.

What did the court decide?

Though the respondent issued a cheque marked as Ex.P1, he subsequently issued a letter to stop payment on Ex.P1 ¶32

Adithya Vs Kiran — Cheque Dishonour | Madras HC (2025)

What the court decided

AI extract

Outcome

Dismissed

¶41

Issue for consideration

Whether an offence under Section 138 of the Negotiable Instruments Act is made out against the respondent, who stopped payment on the cheque (Ex.P1) although substantial funds were available in his account on the date of presentation, given his plea of duplicate/defective goods and counter-demand for refund +1 more

¶38

Court's answer

Though the respondent issued a cheque marked as Ex.P1, he subsequently issued a letter to stop payment on Ex.P1

¶32

Ratio / Principle

On verification it was found that on the date of presentation of the cheque there was a substantial amount available in the respondent's account to honour Ex.P1; the statement of accounts was marked as Ex.D32

¶32

Key takeaways

The respondent, in his reply notice, alleged the supplied goods were duplicate, that customers returned them demanding refund, and called upon the appellant to refund Rs.16,28,400/- with interest at 18% per annum; consequently he stopped payment on the chequeratio¶38
No offence under Section 138 of the Negotiable Instruments Act is made out against the respondent, and the Trial Court rightly acquitted him of that offenceratio¶38
This Court finds no infirmity or illegality in the judgment of acquittal dated 12.02.2025 made in STC No.344 of 2022 on the file of the Fast Track Court No.I, Judicial Magistrate, Coimbatore

Detailed headnote1 paragraphs

Madras High Court (G.K. Ilanthiraiyan, J.) dismissed a criminal appeal filed under Section 419(4) of the Bharatiya Nagarik Suraksha Sanhita, 2023 challenging the acquittal of the respondent under Section 138 of the Negotiable Instruments Act. The appellant-complainant alleged that Rs.4,60,389/- remained outstanding under an invoice for electronic goods, and that the respondent's cheque (Ex.P1) was returned dishonoured with the endorsement 'Payment Stopped by the Drawer'. The Court recorded that on the date of presentation a substantial amount was available in the respondent's account to honour Ex.P1 (statement of accounts Ex.D32), but the respondent had issued a letter to stop payment because, per his reply notice dated 14.07.2022, the goods supplied were alleged to be duplicate/defective, customers had returned them demanding refund, and he had counter-demanded Rs.16,28,400/- with interest at 18% per annum. Holding that no offence under Section 138 of the Negotiable Instruments Act was made out and that the Trial Court (Fast Track Court No.I, Judicial Magistrate, Coimbatore, STC No.344 of 2022, judgment dated 12.02.2025) had rightly acquitted the respondent, the Court found no infirmity or illegality in the acquittal and dismissed the appeal.

¶1

Crl.A.No.760 of 2025

¶2

IN THE HIGH COURT OF JUDICATURE AT MADRAS

¶3

Dated : 02.07.2025

¶4

CORAM

¶5

THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN

¶6

Crl.A.No.760 of 2025

¶7

Adithya Proprietor of SMR Electronics, No.775, Oppanakara Street, Coimbatore – 641 001.

¶8

..... Petitioner

¶9

¶10

Kiran Proprietor of Indus Technologies, No.172/800/788, Mahalakshmi Complex, Ground Floor, 12E Main, Kaveri Nagar, Boomanahalli, Banagalore – 560 068

¶11

..... Respondent.

¶12

Prayer: Criminal Appeal filed under Section 419(4) of the Bharatiya Nagarik Suraksha Sanhita, 2023, to call for the records in Judgment of acquittal dated 12.02.2025 made in STC No.344 of 2022 on the file of the Fast Track Court No.I, Judicial Magistrate, Coimbatore and set aside the same.

¶13

For Appellant : Mr.P.Saravana Sowmiyan

¶14

JUDGMENT

¶15

1/7

¶16

https://www.mhc.tn.gov.in/judis

¶17

¶18

This Criminal Appeal has been filed challenging the order dated 12.02.2025 passed in STC No.344 of 2022 on the file of the Fast Track Court No.I, Judicial Magistrate, Coimbatore, thereby acquitted the respondent for the offence punishable under Section 138 of the Negotiable Instruments Act.

¶19

2. The appellant/complainant lodged a complaint against

¶20

the respondent/accused for the offence under Section 138 of the Negotiable Instruments Act, alleging that the appellant is a sole proprietor of SMR Electronics, engaged in the business of sale of electronic components and allied materials. The respondent is the proprietor of Indus Technologies and was regularly purchasing electronic goods in bulk quantities from the appellant. The respondent used to make payments for the goods purchased at periodical intervals. However, towards the purchase of electronic goods, a sum of Rs.4,60,389/remained outstanding under the invoice. In discharge of the said liability, the respondent issued a cheque and the same was presented for collection. However, it was returned dishonoured with the endorsement “Payment Stopped by the Drawer”. After causing the statutory notice, the appellant

¶21

2/7

¶22

https://www.mhc.tn.gov.in/judis

¶23

Crl.A.No.760 of 2025

¶24

filed a complaint under Section 138 of the Negotiable Instruments Act.

¶25

3. On the side of the appellant, P.W.1 was examined and Ex.P1 to Ex.P6 were marked. On the side of the accused, D.W.1 was examined and Ex.D1 to D32 were marked. On perusal of the oral and documentary evidence, the Trial Court found the respondent not guilty and acquitted him of the charges under Section 138 of the Negotiable Instruments Act.

¶26

4. The learned counsel for the appellant would submit that

¶27

the respondent is liable to pay the dues arising out of the purchase of electronic goods under the invoices. The appellant marked the invoice dated 03.03.2022 as Ex.P5, which was issued pursuant to the purchase order placed by the respondent. In discharge of the said liability, the respondent issued a cheque. However, the respondent stopped the payment of the said cheque without assigning any valid reason. Therefore, the offence under Section 138 of the Negotiable Instruments Act is clearly made out and even then the Trial Court acquitted the respondent on the ground that the appellant failed to prove his case.

¶28

3/7

¶29

https://www.mhc.tn.gov.in/judis

¶30

¶31

5. Heard the learned counsel appearing for the appellant and perused the materials available on record.

¶32

6. A perusal of the records reveals that though the respondent issued a cheque, which was marked as Ex.P1, he subsequently, issued a letter to stop payment on Ex.P1. On the date of return of the cheque, the respondent maintained substantial amount in his account to honour Ex.P1. On verifying the same, it is found that on the date of presentation of the cheque, there was a substantial amount available in the account of the respondent to honour Ex.P1. The statement of accounts was marked as Ex.D32.

¶33

7. A perusal of the reply notice dated 14.07.2022 reveals

¶34

that the electronic goods supplied by the appellant were sold out by the respondent to his customers. However, it is alleged that all the customers found the electronic goods to be defective and returned them, demanding a refund. Therefore, thereby the appellant had cheated the respondent to

¶35

4/7

¶36

https://www.mhc.tn.gov.in/judis

¶37

Crl.A.No.760 of 2025

¶38

the tune of Rs.16,28,400/- by supplying duplicate goods. Consequently, the respondent stopped payment on the cheque issued to the appellant. Further, the respondent, in his reply notice, called upon the appellant to refund a sum of Rs.16,28,400/- with interest at the rate of 18% per annum. Therefore, no offence under Section 138 of the Negotiable Instruments Act is made out against the respondent herein. Hence, the Trial Court rightly acquitted the respondent of the offence under Section 138 of the Negotiable Instruments Act.

¶39

8. In view of the above, this Court finds no infirmity or

¶40

illegality in the Judgment of acquittal dated 12.02.2025 made in STC No.344 of 2022 on the file of the Fast Track Court No.I, Judicial Magistrate, Coimbatore.

¶41

9. Accordingly, this Criminal Appeal stands dismissed.

¶42

02.07.2025

¶43

Index : Yes/No Neutral citation : Yes/No Speaking/non-speaking order

¶44

5/7

¶45

https://www.mhc.tn.gov.in/judis

¶46

¶47