1

IN THE COURT OF JUDICIAL MAGISTRATE ,THIRUVOTTIYUR

Present: J. Saravana Kumar, B.A., B.L., (Hon’s)
Judicial Magistrate, Thiruvottiyur.
Thursday, the 13th day of June 2024
STC No.1261/ 2019
CNR. No. TNTR 280028882019

S. Nithyanandham,
S/o. Selvaraj,
No.22E, 3rd Street,
Wimco Nagar,
Ramanathapuram, Ennore,
Chennai – 600 057. …Complainant

-Vs-
1. Tmt. Geethalakshmi,
D/o. M. Sivakumar,

2. M. Sivakumar,
S/o. Mohandass,

Both residing at
No.9, First Floor,
3rd Street, R.V.K Nagar,
Anna Nagar East,
Chennai – 600 102. ….Accused 1 to 2

The case is coming before me for final hearing on this day (i.e)
13.06.2024 in the presence of M/s.K.Rajalakshmi & V. Nalini,
Counsels for the Complainant and M/s.K. Janarthanan, Counsel for
the Accused herein. Upon perusing the entire material records,
evidence adduced & submissions advanced by both the rival parties
and stood over for consideration till date, this court delivers the
following:-
 2

JUDGEMENT

1. The complainant had filed the present complaint U/s. 138 of the
Negotiable Instruments Act, 1881 by alleging that both the accused
had committed dishonour of cheque of sum of Rs. 5,00,000/-.
Thereby, the complainant had prayed this court to punish both the
accused U/S. 138 NI Act., and also to grant adequate compensation
U/S. 357 of Code of Criminal Procedure.

2. THE AVERMENTS AS IN THE COMPLAINANT, IN CRUX, IS

AS FOLLOWS:

I. The complainant and both the accused are known to each other.
Both the accused had approached the complainant and sought for
financial assistance as way of a loan of Rs. 5,00,000/-, to meet out
their family commitments. In furtherance, the complainant had
issued a loan of Rs. 5,00,000/-. It was agreed by both the accused,
that the above-mentioned loan amount would be repaid within a
period of 3 months. Both the accused did not repay the loan amount
of the loan as assured. As per multiple requisitions made by the
complainant, both the accused had issued a cheque No: 896778,
dated: 4.09.2019, drawn on State Bank Of India, Madras University
Branch for an amount of Rs.5,00,000/-.

II. However, on the instructions, the complainant deposited the above-

mentioned impugned cheques with his banker viz., HDFC Bank,
Mylapore on 20/09/2019. His banker returned the impugned cheque
with an endorsement as ‘Exceeds Arrangement’ on 21.09.2019.
With no other alternative, the complainant issued the statutory
notice dated 05/10/2019. The said notice was received by the
 3

accused on 09/10/2019. Both the accused neither responded to the

statutory notice nor repaid the sum figured out in the impugned
cheque within a period of 15 days, from the date of receipt of the
statutory notice. Hence, the complainant had presented the present
complaint U/S. 138 NI Act, and had prayed for to punish the
accused, and also prayed for adequate compensation U/S. 357 Code
of Criminal Procedure.

3. The complaint was filed along with the documents. After perusing
the complaint and the documents, this court took cognizance of the
complaint and issued summons to both the accused. On appearance
of the accused, the copy of complaint was furnished U/S. 207
CRPC., free of cost.

4. The substance of accusation were stated to both the accused and

questioned. To which, both the accused denied it as false case,
pleaded not guilty and prayed for trial of offence.

5. The complainant examined himself as PW 1 and marked Ex.P.1 to

Ex.P.4. Ex.P.1 is the impugned cheque for a sum of ₹ 5,00,000/-.,
dated: 04.09.2019, Ex.P.2 is the Return Memo dated: 21.09.2019,
Ex.P.3 is the Legal Notice Copy, dated: 5.10.2019 and Ex.P.4 is the
Acknowledgment Card original, Dated:9.10.2019. PW 1 was cross-
examined by the defence side, extensively. On the side of accused,
no witnesses were examined and nill documents marked.
 4

6. POINTS TO BE DETERMINED:

I. Whether the complainant had established ingredients U/s. 138 NI

Act and it attracts statutory presumptions U/s.118 (a) & 139 of the
Negotiable Instruments Act, 1881?
II. Whether the accused had raised a probable defence and it rebuts
the statutory presumption U/s.139 NI Act, 1881?
III.Whether the Complainant is entitled to any order of compensation
U/s. 357 Crpc R/w. 138 NI Act, 1881?
DISCUSSION:
POINT I:

7. Before delving into merits of the case, at first, it is necessary to

ascertain whether the complainant had promptly complied with the
mandatory procedures enunciated U/S. 138 NI Act., and there
arises statutory presumptions U/S. 118 (a) & 139 NI Act. As stated
earlier, the impugned cheque dated 4/09/2019 was deposited on
20/09/2019 with the banker of the complainant, within limitation.
The banker had returned the impugned cheque for the reason
“Exceeds Arrangement”. The complainant had issued the statutory
notice on 05/10/2019. Both the accused had received the said legal
notice on the date ie., 09/10/2019. The complaint U/S. 138 NI Act
was filed on 5/11/2019. It reflects that the complainant had
complied with the mandatory procedures enunciated U/S. 138 NI
Act. Both the accused had also admitted the signature found in the
impugned cheque. The said fact raises a statutory presumption in
favour of the complainant U/S. 118 (a) & 139 N I act.

Point I is answered accordingly and in favour of the Complainant

herein.
 5

POINT II:-

LEGAL PROPOSITION ON REBUTTAL OF THE STATUTORY

PRESUMPTION U/s.118 & 139 NI ACT:-

8. Before determining the question of rebuttal of the accused, it is

just and necessary to understand the legal principles expounded by
the Hon’ble Supreme Court and our Hon’ble High Court about how
and in what manner, the legal presumptions are to be rebutted by
the accused in a dishonour of cheque cases.

9. The Hon’ble Supreme Court in Bharat Barrel and Drum

Manufacturing Co. Vs Amin Chand Pyarelal reported in (1999) 3 SCC
35 has observed as follows:-
“11. Though the evidential burden is initially placed on the
Defendant by virtue of Section 118 it can be rebutted by the
Defendant by showing a preponderance of probabilities that
such consideration as stated in the pronate, or in the suit
notice or in the plaint does not exist and once the
presumption is so rebutted, the said presumption
'disappears'. For the purpose of rebutting the initial evidential
burden, the Defendant can rely on direct evidence or
circumstantial evidence or on presumptions of law or fact.
Once such convincing rebuttal evidence is adduced and
accepted by the Court, having regard to all the circumstances
of the case and the preponderance of probabilities, the
evidential burden shifts back to the Plaintiff who has also the
legal burden.”
 6

10. The Hon’ble Supreme Court in Kumar Exports Vs. Sharma

Carpets reported in AIR 2009 SC 1518 has observed as
follows:-
''11. The use of the phrase "until the contrary is proved" in
Section 118 of the Act and use of the words "unless the
contrary is proved" in Section 139 of the Act read with
definitions of "may presume" and "shall presume" as given in
Section 4 of the Evidence Act, makes it at once clear that
presumptions to be raised under both the provisions are
rebuttable. When a presumption is rebuttable, it only points
out that the party on whom lies the duty of going forward
with evidence, on the fact presumed and when that party has
produced evidence fairly and reasonably tending to show that
the real fact is not as presumed, the purpose of the
presumption is over. The accused in a trial U/S. 138 of the
Act has two options. He can either show that consideration
and debt did not exist or that under the particular
circumstances of the case the non-existence of consideration
and debt is so probable that a prudent man ought to suppose
that no consideration and debt existed. To rebut the
statutory presumptions an accused is not expected to prove
his defence beyond reasonable doubt as is expected of the
complainant in a criminal trial. The accused may adduce
direct evidence to prove that the note in question was not
supported by consideration and that there was no debt or
liability to be discharged by him. However, the court need
not insist in every case that the accused should disprove the
non-existence of consideration and debt by leading direct
 7

evidence because the existence of negative evidence is

neither possible nor contemplated. At the same time, it is
clear that bare denial of the passing of the consideration and
existence of debt, apparently would not serve the purpose of
the accused. Something which is probable has to be brought
on record for getting the burden of proof shifted to the
complainant. To disprove the presumptions, the accused
should bring on record such facts and circumstances, upon
consideration of which, the court may either believe that the
consideration and debt did not exist or their non- existence
was so probable that a prudent man would under the
circumstances of the case, act upon the plea that they did
not exist. Apart from adducing direct evidence to prove that
the note in question was not supported by consideration or
that he had not incurred any debt or liability, the accused
may also rely upon circumstantial evidence and if the
circumstances so relied upon are compelling, the burden may
likewise shift again on to the complainant. The accused may
also rely upon presumptions of fact, for instance, those
mentioned in Section 114 of the Evidence Act to rebut the
presumptions arising U/S.s 118 and 139 of the Act. The
accused has also an option to prove the non-existence of
consideration and debt or liability either by letting in
evidence or in some clear and exceptional cases, from the
case set out by the complainant, that is, the averments in
the complaint, the case set out in the statutory notice and
evidence adduced by the complainant during the trial. Once
such rebuttal evidence is adduced and accepted by the court,
 8

having regard to all the circumstances of the case and the

preponderance of probabilities, the evidential burden shifts
back to the complainant and, thereafter, the presumptions
U/S.s 118 and 139 of the Act will not again come to the
complainant's rescue.”

11. The Hon’ble Supreme Court in Vijay Vs. Laxman & Anr reported
in (2013) 3 SCC 86 has observed as follows:-

''19. ...We are not unmindful of the fact that there is a

presumption that the issue of a cheque is for consideration.
Sections 118 and 139 of the NI Act make that abundantly
clear. That presumption is, however, rebuttable in nature.
What is most important is that the standard of proof required
for rebutting any such presumption is not as high as that
required of the prosecution. So long as the accused can
make his version reasonably probable, the burden of
rebutting the presumption would stand discharged. Whether
or not it is so in a given case depends upon the facts and
circumstances of that case. It is trite that the courts can take
into consideration the circumstances appearing in the
evidence to determine whether the presumption should be
held to be sufficiently rebutted. The legal position regarding
the standard of proof required for rebutting a presumption is
fairly well settled by a long line of decisions of this Court.”
 9

12. Our Hon’ble High Court in R.Soundararajan Vs. Ramasamy in

Crl.RC.No.549/2016 has held as follows:-
“10.From the evidence and materials adduced by the parties,
it is manifest that the petitioner has not disputed the
issuance of cheque in question and the signature found
therein. As such, the presumption lies in favour of the
respondent that the cheque in question was issued by the
petitioner for legally enforceable liability. In such
circumstances, the petitioner has to rebut the same through
preponderance of probability, whereas the oral evidence
adduced by him would only disclose the fact that there were
money transactions between the two. Though he replied to
the legal notice issued by the respondent, the contents of the
same were not substantiated by any oral or documentary
evidence. Further, nothing has been elicited from the cross
examination of P.W.1. That apart, the petitioner has not
subjected himself to witness box, which is fatal to his case.
In the considered opinion of this Court, a mere denial of the
averments made by the respondent is not sufficient for
rebutting the presumptions arising in his favour and it is for
the petitioner to demonstrate that there exists
preponderance of probabilities that the cheque in question
was not issued towards discharge of any legally enforceable
debt/liability, but the petitioner has failed to do so. On the
other hand, the respondent has proved his case that the
petitioner committed the offence U/S. 138 of the NI Act.
Hence, the trial Court has rightly convicted the petitioner for
 10

the same and the same was also affirmed by the Appellate
Court.”
13. The above Judgments clearly enunciate the legal principles
about how and in what manner the legal presumption is to be
rebutted by the accused. Mere denial of the accused in
averments is not sufficient to rebut the presumptions bestowed
by the statute. The accused is cast upon a duty to demonstrate
that there exists preponderance of probabilities that the cheque
in question was not issued towards discharge of any legally
enforceable debt/liability. The accused need not necessarily
produce direct evidence to rebut the presumption. But can also
use the cross-examination of the complainant. If required, the
accused can also resort to the recourse of S.114 Indian
Evidence Act to dislodge the legal presumptions.

ANALYSIS OF THE DEFENCES RAISED BY THE DEFENCE SIDE

WITH THE ABOVE LEGAL PRINCIPLES:-

The defence of the accused:

14. With the above legal principles, the present case is to be approached
to determine whether the accused has rebutted the legal
presumptions standing in favour of the complainant (ie)., PW1. The
prime defence raised by both the accused are that, they have no
acquaintance with the complainant. As alleged, they did not borrow
any amount of Rs.5,00,000/-, as a loan, from the complainant
herein. They have obtained a loan of Rs. 1,00,000/-, only from one
Pothiraja, and the impugned cheque was given to him as a security.
The amount borrowed from the said Pothiraja, had been duly repaid.
However, the said Pothiraja, with ill intention to extort and attain
 11

unjust enrichment, had misused the impugned cheque through the

complainant herein. Both accused pointing by out certain averments
and statements both in the material records as well as the
evidences of the complainant, claimed, to have raised a probable
defence and the same rebuts the Statutory presumptions U/s. 118 &
139 NI Act, lying in favour of the complainant herein.

Arguments Submitted by the Learned Defence Counsel:-

15. The Learned Defence Counsel took this Court through the legal
notice, Sworn Statement and Proof affidavit and submitted that in
all these 3 documents the complainant / PW1, had given
contradictory statements regarding the acquaintance with both the
accused. The legal notice is very much silent about the acquaintance
between the complainant and the accused. In the sworn statement,
the complainant had merely stated that 1st accused is a Government
Employee and both the accused had approached him for a loan of
Rs. 5,00,000/-, to meet out their personal expenses. However, for
the 1st time in the proof affidavit, PW1 had stated that the 1st
accused is a Government Employee and in that manner, he has an
acquaintance with A1. Thereafter, the learned counsel for the
defence by taking this Court through the evidence of PW1,
submitted that the answers elicited from PW1 in his
cross-examination raises serious doubts about his financial capacity
of having a huge amount to lend a sum of Rs.5,00,000/-, to both
the accused. For the 1st time in the cross-examination, PW1 had
stated to have issued the alleged loan of Rs.5,00,000/-, in single
payment and on 4th to 6th April 2019.
 12

16. In his cross-examination, PW1 had admitted not filing any

Income-tax returns to the Sarath Enterprises, run by him. There are
also contradictory stands of PW1, regarding possessing of such a
huge amount ie., Rs.5,00,000/-, alleged to have been loaned to
both the accused. By citing, a ruling of Our Hon’ble Supreme Court,
in Raja Ram Sriramalu Naidu Versus Maruthachalam(D), reported in
2023, SC.46., submitted that the non-filing of Income-Tax returns,
before this Court is fatal, and prayed this Court to acquit both the
accused.

17. Further, the learned counsel by contending that though PW1, had
stated running an Enterprises in the name and style as
“Sarath Enterprises”, he had not produced any documents to
establish the same. The same would raise doubts and suspicion over
the evidence of PW1. By making the above arguments, the learned
defence counsel submitted that, a probable defence had been raised
to dislodge the statutory presumption U/s. 118 & 139 of Negotiable
Instrument Act. On the contrary, the complainant had not
established his case of lending a sum of Rs.5,00,000/-, to both the
accused as a loan. Thereby, prayed to acquit both the accused.

Arguments Submitted by the Learned Complainant Counsel:-

18. Per contra, the Learned Complainant Counsel, argued that both the
accused had admitted their signature in the impugned cheque.
Though, it was the specific defence, that the cheques were issued as
a security to the amount borrowed from one Pothiraja, the accused
had neither taken any steps, nor brought the said Pothiraja, to be
examined as witnesses before this Court. A verbal denial without
any sufficient evidence would not establish their stand. PW1 in his
 13

cross-examination had categorically stated before this court, if

require he is ready and always willing to produce documents
relating to the Sarath Enterprises. Countering to the source of
income and to possess a sum of Rs.5,00,000/-, the learned
complainant counsel, submitted that even accepting the arguments
of learned defence counsel to be true, the reading of cross-
examination, of PW1 doesn’t raise any probable defence in that
regard. Thereby, the learned complainant counsel, submitted that
the Statutory presumptions U/s. 118 & 139 NI Act, is intact and not
rebutted through any of the defences raised by the accused herein.
Thereby, prayed to convict and impose adequate punishment to
both the accused. The learned complainant counsel also prayed this
court to grant adequate compensation U/s. 138 r/w. 357 of Crpc.

Analysis of records and evidences of Witnesses:-

19. Now, let us scrutinize and analyse both the material records as well
as evidence adduced by PW1 to ascertain whether the defences
raised by both the accused are of a probable one and the same
dislodges the statutory presumption lying U/s. 118 & 139,
Negotiable Instruments Act. Ex.P.3 is the first legal communication
between the parties at rival sides. The perusal of legal notice would
reflect that the said legal notice had been issued in consequence to
the dishonour of Impugned cheque, Ex.P.1, issued by both the
accused. It reflects that both the accused had approached the
complainant and availed a sum of Rs.5,00,000/-, as loan, to meet
out the personal family expenses. On demand, both the accused as
joint holder of a bank account in the State Bank of India, Madras
University Branch, had issued the Impugned cheque towards the
 14

discharge of above mentioned loan amount of Rs.5,00,00/-.

Admittedly, the statutory notice was received by both the accused
and acknowledged.

20. However, there was no reply notice countering or objecting the

contents of Ex.P.3 was issued by both the accused. The Sworn
statement of the complainant would also reflect the similar facts as
seen in the Ex.P.3 ie., legal notice. In addition to the same it
reflects that A1 ie., Geetha Lakshmi is a Government employee and
in that manner, the complainant has acquaintance with both the
accused. In a similar manner, the complaint filed before this court
also carries the same facts stated in the sworn statement. After
appearance of both the accused before this Court, this Court had
stated the particulars of offences to both the accused and
questioned them. In the first questioning, both the accused had
simply stated it to be a false case. Thereafter, the complainant
examined himself as PW1 by filing a proof affidavit and marked the
above mentioned Exhibits ie., Ex.P.1 to Ex.P.4. The said proof
affidavit was recorded as chief examination of the complainant. In
his proof affidavit also, PW1 had stated the same facts regarding the
acquaintance with the accused and also lending a sum of
Rs.5,00,000/-, to both the accused out of his savings.

21. The evidence of PW1 was tested by the defence side through cross
examination. As stated above, the defence counsel put forth several
questions and suggestions relating to the acquaintance of
complainant with both the accused, financial capacity of the
complainant to disburse a sum of Rs.5,00,000/-, as a loan,
acquaintance with one Pothiraja, and misusing the impugned
 15

cheque issued to the said Pothiraja for the loan of Rs. 1,00,000/-,
borrowed by the accused. To which, PW1 had stated in a firm
manner, that he is painting contractor and undertaking his work in
the name and style of Style of “Sarath Enterprises”. He had also
stated that the above amount of Rs.5,00,00/- was lent to both the
accused during 4th-6th April 2019, by drawing the said sum from his
bank account. Thereafter, only at the instruction of both the
accused, the cheque bearing the date as 4.09.2019, were deposited
with his banker on 20.09.2019. He had also spoken in a firm
manner that if required, he is ready to produce the documents, not
only to establish running an enterprises in the name of “Sarath
Enterprises”, but also, to show that the above amount of
Rs.5,00,000/-, was drawn from his bank account during April 2019.

22. Though, he had admitted having acquaintance with one Pothiraja, he

had stoutly denied that at the instigation of said Pothiraja, he had
misused the cheque issued as a security to the amount borrowed by
the accused from the said Pothiraja. To a specific question put by
the defence regarding the sourse of income and savings had by
PW1, PW1 had categorically stated undertaking the “Sarath
Enterprises” from the year 2000 and the above amount is nothing
but the savings earned from the long standing of his business. The
above reading of statements made by PW1 to various questions and
suggestions put by the defence doesn’t raise any suspicion
regarding the genuine of complaint. As stated above, though there
were several defences raised regarding acquaintance with one
Pothiraja, and the cheque had been misused by the said Pothiraja
through PW1, the defence had not taken any steps or raised any
probable defence to invoke the principal of preponderance of
 16

probability that they had borrowed an amount of Rs.1,00,000/-

from the said Pothiraja, by issuing the impugned cheque to him as a
security. In this regard arguments of the complainant counsel that
mere verbal defence without supported by any evidences cannot be
accepted finds forceful. The defences raised regarding acquaintance
of complainant with the accused and the source of income of the
complainant seems to be not a probable one. The material records
and evidences of PW1 doesn’t invoke any doubts in the minds of the
court regarding the acquaintance of complainant with the accused.

23. It is also to be keenly seen that, Ex.P.3 ie., legal notice was issued
on 5/10/2019 and the same had been acknowledged vide Ex.P.4.,
by both the accused on 8/10/2019. Thereafter, the present
complaint was lodged before this court on 5/10/2019., and both the
accused were questioned on 19/03/2021. The cross examination of
PW1 had taken place on 19/10/2022, and 24/11/2022. The above
transaction of events would reflect that only after a period of
approximately 3 years from the date of statutory legal notice ie.,
5/10/2019, they had taken such a defence for the first time in the
cross examination of PW1. It is reiterated, neither, reply notice was
issued by both the accused nor the defences were taken at the 1st
questioning before this Court. Even on that ground, this Court is
unable to accept the submission of Learned Defence Counsel that
the defences are a probable one and the same dislodges the
statutory presumption lying in favour of PW1 U/s. 118 & 139 NI Act.
For the reasons stated above this court is of the view that various
defences raised by the accused are not a probable one and the
same doesn’t rebut the statutory presumption lying in favour of the
 17

complainant U/s. 118 & 139 NI Act, either through direct evidence
or by invoking the principal of preponderance of probabilities.

Point II is answered accordingly and in favour of the complainant

herein.

POINT III:-

From the above deliberations, it could be seen that the accused

had committed an offence of dishonour of impugned cheque of sum
of Rs.5,00,000/-. It would have really caused considerable loss to
the complainant herein. Hence, this Court is of the view that the
complainant is entitled to compensation and ought to be necessarily
compensated U/S.357 Crpc.

Point III is answered accordingly and in favour of the Complainant

herein.

RESULT:

In the result, both the accused are convicted U/s.138 of

Negotiable Instrument Act and both the accused are sentenced to
undergo Simple Imprisonment for a period of 6 months. Further,
both the accused are directed U/s. 357(3) Cr.P.C., to pay a
compensation of Rs.7,00,000/- (Rupees seven Lakhs Only) to the
complainant within a period of 30 days. In default to pay
compensation, the accused shall undergo simple imprisonment for a
period of 30 days.
 18

Dictated to the Steno-typist and typed into the computer. Print

out taken. Verified and pronounced by me in Open court on this the
13th day of June 2024.

Sd/- J. Saravana Kumar,

Judicial Magistrate,
Thiruvottiyur.
COMPLAINANT SIDE WITNESSES:

PW.1 Nithyanandham

COMPLAINANT SIDE EXHIBITS:

Ex.P.1 Cheque No. 896778 dated 04.09.2019 original

Ex.P.2 Return Memo dated: 21.09.2019
Ex.P.3 Legal Notice Copy, dated: 5.10.2019
Ex.P.4 Acknowledgment Card original, Dated:9.10.2019
ACCUSES SIDE WITNESS: NIL

DEFENCE SIDE EXHIBITS: NIL

/- J. mar, Sd/- J. Saravana Kumar,

Judicial Magistrate,
Thiruvottiyur.
// True Copy //

Judicial Magistrate,
Thiruvottiyur.