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TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1425
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....nt. II. Factual Background: 3. The complainant, his father, and his wife are practising dentists at Tenkasi. The accused/revision petitioner is an advocate at Tenkasi. 4. Genesis of Complaint: The accused had been running an auction chit scheme at Tenkasi. The complainant joined the chit in 2011. Since the accused was in need of money to run the chit fund scheme, he approached the complainant for a loan. In response, the complainant paid (i) Rs. 3,00,000/- (Rupees Three Lakhs only) on 03.10.2011 and (ii) Rs. 3,50,000/- (Rupees Three Lakhs and Fifty Thousand only) on 14.12.2011 by pledging the jewels of his wife and his father. Thereafter, the accused received a loan of Rs. 3,25,000/- (Rupees Three Lakhs and Twenty Five Thousand only) through self-cheques of the complainant's father and wife. In such sequence, during 03.10.2011 to 2013, the accused borrowed a total of Rs. 10,50,000/- (Rupees Ten Lakhs and Fifty Thousand only) from the complainant. 5. A dispute arose in May 2014 regarding repayment of the matured chit amount. On the complainant's police complaint, the accused paid Rs. 2,00,000/- (Rupees Two Lakhs only) and agreed to pay the balance within three months,....
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....ued to the complainant and that no legally enforceable debt subsisted. Trial Court's Findings: 9. The trial Court framed these points: (i) entitlement to presumptions under Sections 118 and 139 NI Act, 1881; (ii) whether such presumptions stood rebutted; (iii) if not, whether offence under Section 138 NI Act, 1881, stood proved beyond reasonable doubt. 10. Ex.P1 is the cheque dated 01.07.2014 drawn on Axis Bank, Ilanji Branch (SB A/c No.623010100002349). The cheque was presented on 05.08.2014 (Ex.P2) and returned on 09.08.2014 with endorsement "payment stopped by drawer" (Ex.P3), with covering documents (Ex.P4). FIR in Crime No.271 of 2014 dated 04.07.2014 was marked as Ex.P5. Statutory notices were Ex.P8 (dated 01.09.2014) with acknowledgment Ex.P9; rejoinder Ex.P10 with acknowledgment Ex.P11; reply dated 12.09.2014 was Ex.P12. The learned Trial Court recorded that the cheque and the signature thereon were not denied by the accused. 11. The defence of loss of signed cheque leaves during travel, supported by Exs.R4 to R13 (police complaint/CSR, stop-payment letter/confirmation, paper publication, complaints by post), was considered improbable inter alia because: (a) bei....
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....evidentiary burden to the accused. The "loss of cheque" theory was found unproved and implausible. The plea on different inks and quantum was rejected in view of Section 20 NI Act, 1881, and the complainant's case that total borrowing was Rs. 10,50,000/- (Rupees Ten Lakhs and Fifty Thousand only) while the cheque was for Rs. 10,00,000/- (Rupees Ten Lakhs only) was found convincing. Other rulings cited by the accused were held inapplicable. The appeal was dismissed; conviction, sentence, and compensation awarded by the learned Trial Court were confirmed. The learned Principal District and Sessions Judge, Tirunelveli, in C.A. No.56 of 2023, confirmed the conviction and sentence, applying Kalamani Tex v. P. Balasubramanian (supra 2) and Rajesh Jain Vs. Ajay Singh (Supra 3). It confirmed two years imprisonment and Rs. 20,00,000/- (Rupees Twenty Lakhs only) compensation. V. Grounds urged in Revision: 17. The revision memorandum asserts, inter alia, that: (a) the Courts below misread evidence; (b) Ex.P1 was not issued towards any legally enforceable debt; (c) monies were allegedly received via self-cheques of the complainant's wife/father and not from the complainant; (d) the learn....
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.... of Presentation under Section 138: 20.1.The petitioner urges a statutory bar under Section 138 (read with the proviso referring to presentation within "six months or within the period of its validity, whichever is earlier"), contending that the complainant admitted in cross-examination that the cheque was issued/received in August 2013, whereas it was presented only on 05.08.2014. 20.2.Argued that "validity" (as per banking rules) is three months, and thus presentation after a year is fatal even if the banker returned only on the basis of the printed date. Submitted that a pure question of law can be raised even at the revision stage. 21. Defence of "Lost Cheque/Madurai Theory": 21.1. Contended that the cheque book containing three presigned blank leaves was lost at Madurai on 02.07.2014 while travelling to the Madurai Bench to consult an advocate regarding a family case; and that he immediately lodged a police complaint at Othakadai (CSR produced Ex.D5), issued stop payment to the bank on 04.07.2014, made paper publication on 05.07.2014 (Ex.D8). Relied on these to assert that the cheque was not issued to the complainant, and that the entire body was filled by the comp....
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....be proved), referring to alleged admissions in cross examination. He insisted that the compensation being twice the cheque amount is punitive and merits interference. Submissions of the learned Counsel for the Respondent/Complainant: 25. Relationship, course of dealings and cheque issuance: 25.1. Accepted the longstanding personal and financial relationship (2010-2014) between the parties (dentist-advocate; close friends), under which the respondent repeatedly advanced monies. The relationship soured only in 2014. 25.2. Affirmed that the cheque for Rs. 10,00,000/- (Rupees Ten Lakhs only) bears the accused's signature and amount in his handwriting; upon instructions from the accused, the date 01.07.2014 was filled and the cheque was presented on 05.08.2014. 25.3.Clarified that Section 20 NI Act, 1881, authorised completion of an incomplete instrument; therefore, the act of filling the date does not impeach the instrument. 26. Presentation Within Time; 'Bill of Exchange' v. 'Cheque' : 26.1.On limitation/validity: submitted that a post-dated instrument is only a bill of exchange until the date on the face of the instrument arrives, whereupon it becomes a cheque. H....
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.... NI Act shall be read harmoniously with the time prescribed in proviso (a) to Section 138. If so read, what determines the time of commencement of period of presentation is the date of the cheque and not the date of delivery of the cheque. 10. The legislature cannot be understood to have intended to give effect to the date of issue of cheque in all cases invariably and discard the date of cheque as irrelevant. If the date of delivery of cheque is to determine the period of presentation, distinct from or in preference to the date of the cheque as explained above, it is sure to bring about anomalous situation and defeat the underlying object of the NI Act.. Such an interpretation will cause to prevent a drawer from delivering the cheque postdated for a period longer than three months of the date of issue. This, however, does not mean that Sections 84 and 138 come into conflict with each other. The date of issue of cheque mentioned in Section 84(1) is not irrelevant and capable of rejection in cases where the date of cheque appearing on its face and the date of issue are one and the same." 27.'Madurai Loss' Defence is Implausible; No Probable Rebuttal: 27.1.The Madurai ....
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....itted, presumption under Section 139 attaches; evidential burden shifts to the accused; mere assertions are insufficient. Kalamani Tex & another v. P. Balasubramanian (Supra 2), reiterates the reverse onus and scope of rebuttal under Sections 118 & 139. Bir Singh v. Mukesh Kumar (Supra 1), holder in due course can fill in blanks on a signed instrument; such filling does not invalidate the instrument. Ashok Yeshwan Badave v. Surendra Madavrao Nigojkar & another (Supra 7), cited for general NI Act principles supportive of complainant's case. 32.Quantum of Compensation and Sentence: On sentence/compensation: with a Rs. 10,00,000/- (Rupees Ten Lakhs only) cheque and proven default, the two years simple imprisonment and Rs. 20,00,000/- (Rupees Twenty Lakhs only) compensation under Section 357(3) Cr.P.C., 1973, have been affirmed by the Appellate Court; nothing warrants interference in revision. VII. Analysis: 33.Validity of Cheque Presentation: 33.1. The accused's plea that the cheque was issued in 2013 and presented after a year cannot be accepted. The relevant portion of Section 5 and the provisions of Sections 6,19,138,139 and 140 of the Negotiable Instruments Act,1....
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....other liability. (emphasis added)" "S.139. Presumption in favour of holder. - It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. S.140. Defence which may not be allowed in any prosecution under Section 138. It shall not be a defence in a prosecution for an offence under Section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that section.'' 33.2. No doubt in terms of Section 5 and 6 of the Act, a bill of exchange is a negotiable instrument in writing directing a third party to pay a specific sum of money on a particular date or on demand. Like wise a cheque is a bill of exchange drawn by the holder on his bank, expressly specifying to be payable only on demand. Thus, a bill of exchange even if drawn on a bank cannot be a cheque, if it is not payable on demand. Hence a 'post dated cheque' becomes a cheque only on the dawn of the date mentioned in it and until then, it remains only a bill of exchange. ....