FORTIS FINANCIAL SERVICES LTD Vs. NEPTUNE INFLATABLES LTD

JUDGEMENT

(1.) THE short facts of the case are as follows:- 1. The revision petitioner/complainant had initiated a calendar case in C.C.No.7582 of 1997, on the file of the XVIII Metropolitan Magistrate, Saidapet, Chennai, against the three accused stating that the first accused had received a sum of Rs.50,00,000/- as loan. In order to discharge the said loan, the accused company had issued five cheques in favour of the complainant. Out of the five cheques, the complainant presented three cheques for a sum of Rs.50,00,000/-, Rs.3,50,000/- and Rs.3,50,000/- respectively in the complainant's banker, viz., Central Bank of India, Teynampet Branch on 14.12.1996 and the same were returned with an endorsement "exceeds arrangement" on 16.12.1996. Thereafter, the complainant had issued legal notice to the accused on 19.12.1996 and the same had been received by the accused on 21.12.1996. The accused also sent a reply notice on 31.12.1996. However, the accused had not paid the cheque amount even after receipt of the notice. Hence, the above case has been filed under Section 138 of Negotiable Instruments Act.

(2.) ON the side of the complainant, three witnesses were examined and 29 documents were marked, viz., power of attorney, amalgamation of second and third empire company with the complainant company, three cheques which were dishonoured, memo issued by accused bank, legal notice, acknowledgment card, reply notice, authorization letters to P.W.2 and P.W.3, bank statement of accused, board resolution, promissory note, loan agreement, letter of credit, pronote executed by the accused for a sum of Rs.50,00,000/-, cheque issued towards payment of six months interest in favour of the complainant, undertaking letter given by the accused to settle the loan amount and letter written by the accused to the complainant regarding receipt of the loan of Rs.50,00,000/-.

(3.) ON being questioned, all the accused had pleaded not guilty before the trial Court and hence the case was proceeded with. P.W.1 had adduced evidence that he is functioning as Chief Manager in the complainant's firm. P.W.1 further stated that the Empire Finance Company had been merged with the complainant's company. He deposed that the second accused is the Administrative Director and the third accused is a Director. He further adduced evidence that in the year 1995, all the accused had received a sum of Rs.50,00,000/- and they agreed to repay the said principal amount along with interest, amounting to, a sum of Rs.64,00,000/-. In order to discharge the said loan, the accused had issued five cheques. Out of which, three cheques have been filed in the present case. One of the cheques is for a sum of Rs.50,00,000/- and each of the other two cheques is for a sum of Rs.3,50,000/-. P.W.1 further stated that all the three cheques were presented in their bank, viz., Central Bank of India, Teynampet Branch, on 14.12.1996. All the three cheques were returned on 16.12.1996 with an endorsement "exceeds arrangement". Supporting his evidence, he had marked the above mentioned 29 documents.