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Our Legal Correspondent

CHENNAI, Jan. 4

THE Madras High Court has held that an order of the Additional Sessions Judge setting aside the conviction by the lower court of the accused in a case involving bouncing of cheques could not be sustained for the reason that a defence witness was not allowed to be examined.

Allowing a criminal appeal by Mr A. Krishna Reddy against the order of III Additional Sessions Judge, Chennai, Mr Justice Malai Subramanian said that insofar as the sentence imposed by the trial court was concerned, it could not be restored as it was, since the maximum punishment of one year had been imposed, while imposing a fine of Rs 13,87,000, which was beyond the power of the Magistrate concerned.

The respondent (Mr P.V.R.S. Mani Kumar) borrowed an amount of Rs 6,60,000 from the appellant (Krishna Reddy) by executing a promissory note. The amount had not been paid back. Since the appellant demanded the amount back with interest, the respondent issued two cheques on December 15, 1997, one for Rs 6,60,000 towards principal loan and another cheque for Rs 7,25,920 towards interest. Both the cheques were drawn on Syndicate Bank, Perambur. When the appellant deposited the cheques on March 31, 1998, they were dishonoured due to `insufficiency of funds'. The appellant, therefore, lodged a complaint against the respondent for the offence punishable under Section 138 of the Negotiable Instruments Act. The VII Metropolitan Magistrate, George Town, Chennai, after recording evidence, convicted the respondent for the said offence and sentenced him to undergo simple imprisonment for one year and to pay a fine of Rs 13,87,000, and in default, to suffer one month's SI. He also ordered compensation of Rs 13,86,000 to the appellant out of the fine amount. The respondent went on appeal challenging his conviction.

The III Additional Sessions Judge, who heard the appeal, allowed it and set aside the conviction. Aggrieved by the order of the Additional Sessions Judge, the appellant came with the present appeal.

The appellate judge was of the opinion that demand of interest to the cheque amount was wrong. He also held that there was no legally enforceable debt.

The High Court said that on facts the unimpeachable evidence of prosecution witness and exhibits clearly established that the respondent issued both the impugned cheques as a consideration to discharge the legally enforceable debt. In the complaint, it had been specifically mentioned that the first cheque was issued towards discharge of the principal amount and the second cheque was issued towards discharge of interest up to March 31, 1998. Therefore, the points urged by the respondent were untenable. The non-production of the promissory note said to have been executed by the respondent and non-production of the income-tax returns by the appellant did not in any way take the case of the appellant out of court in view of abundant evidence available on record that the cheques were issued towards discharge of legally enforceable debt.

The Judge in the High Court said that the appellate judgement passed by the Additional Sessions Judge could not be sustained and it had to be set aside an the appeal stood allowed.

Referring to the punishment awarded by the Magistrate, the Judge said that the maximum sentence of fine he could impose was only Rs 5,000, but there could be no limit for compensation. Technically, he ought not to have imposed a fine of Rs 13,87,000. Taking into consideration the prior friendship of the parties and the way in which the transaction took place, the Judge said he was inclined to reduce the sentence of imprisonment to 3 months SI while reducing the amount of compensation to Rs 6,60,000, which seemed to be the principal amount borrowed by way of promissory note and deleted the sentence of fine of Rs 1,000. With this modification of the sentence, the appeal stood allowed.

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