R.S. Ramanathan, J. - (1.) THE complainant in C.C. No. 52 of 2001 on the file of the Judicial Magistrate No. II, Erode is the appellant. The appellant filed the above complaint under section 138 of the Negotiable Instruments Act stating that the first accused, a registered firm in which Accused Nos. 2 to 6 were partners, purchased yarn on credit from the complainant/appellant from 18.2.1997 to 16.4.1999 and towards that transactions, the accused owed a sum of Rs. 7,62,051/ - to the complainant and towards the discharge of the above liability, the second accused on behalf of the first accused issued 7 cheques for a total sum of Rs. 6,19,524/ - and the cheques were drawn on Federal Bank, Erode Branch and except one Cheque bearing No. 603447 dated 3.10.1998, the other cheques were dishonoured as "funds insufficient". The Cheque bearing No. 603447 dated 3.10.1998 was subsequently presented for collection and the same was also dishonoured. Therefore, a statutory notice was issued to the respondents 2 to 5. Due to inadvertence, registered notice was not sent to the sixth accused. However, being a partner of the first accused, he is also responsible. Accused Nos. 3 and 4 sent reply notice contending false allegations and as the amount was not repaid, the respondents are liable to be prosecuted. The learned Judicial Magistrate dismissed the complaint and aggrieved by the same, the present Appeal is filed. Mr. R. Sreerangan, learned counsel appearing for the appellant submitted that the trial court without properly appreciating the admission of the respondents/accused wherein they admitted the issuance of cheques, ought to have raised a presumption in favour of the complainant and ought to have held that the respondents are liable to be convicted as they failed to repay the amounts due under the Cheques.
(2.) HE also submitted that the trial court erred in holding that Exs. P. 1 and P. 2 are not the original documents and they are copies and in the absence of filing original documents Exs. P. 1 and P. 2 cannot be taken into consideration to prove that there were transaction between the appellant and the respondents and as per the transaction, the respondents owed amount to the appellant as agreed by them. The learned counsel further submitted that having regard to the issuance of Cheques by the respondents and having regard to the defence taken by the respondents that the Cheques were given as a security for the purchases to be made later by the accused and they did not purchase any yarn from the appellant and demanded return of the Cheques issued by them and failure on the part of the respondents to prove the same, even assuming that Exs. P. 1 and P. 2 cannot be admitted having regard to the presumption available under Section 139 of the N.I. Act, the trial Court ought to have held that the Cheques were issued towards legally enforceable liability and the respondents failed to rebut the presumption by substantiating their case and ought to have convicted the respondents. He therefore submitted that the finding of the trial Court that the Cheques were not issued towards legally enforceable liability is erroneous and the same is liable to be set aside. He further submitted that the trial Court erred in holding that the appellant is not a holder in due course, having regard to the admission of P.W. 1 that the Cheques were discounted with the financiers and the appellant received money and later the financiers got back the money from the appellant and thereafter, the cheques were presented for collection. The learned further submitted that the trial Court without appreciating the fact that the Cheques can be presented during the validity period for any number of times and admittedly, the validity period was extended by the second accused by altering the date in all the Cheques and endorsements were also made to that effect and though the second accused denied the endorsement made by him, no attempt was made by him to send the Cheque for expert's opinion that the endorsements were not made by him, the trial Court ought to have held that the appellant is a holder in due course and being a payee is entitled to initiate the prosecution. He further submitted that the trial Court erred in holding that the statutory notice was not issued by the proper person and the statutory notice was a invalid one and therefore, the prosecution is liable to be quashed. He submitted that the notice was issued by the power agent of the appellant, by name, Murugan and though the power document was not marked and the said Murugan was not examined, the statutory notice was issued on behalf of the complainant by the said Murugan and therefore, it can be construed that valid statutory notice was issued by the complainant and therefore, the finding that the notice was not valid, is liable to be set aside. The trial Court also erred in holding that the appellant failed to prove the passing of consideration without properly appreciating the fact that the respondents failed to rebut the presumption and the trial Court further erred in hold that the appellant received money from the financiers by endorsing the Cheques and therefore, the appellant cannot maintain any action and these findings are liable to be set aside and he, therefore, submitted that having regard to the presumption available to the complainant under Section 139 of the N.I. Act, the trial Court ought to have convicted the respondents. Mr. N. Manokaran, learned counsel appearing for the respondents submitted that the trial court rightly held that notice was not properly issued by the holder in due course or by the payee and the appellant failed to prove that they were the holder in due course to maintain action and the cheques were conveniently altered by the appellant by forging the signature of the second accused and having received the consideration for the Cheques by endorsing those Cheques in favour of the financiers, the appellant has no locus -standi to present the Cheques for collection as the appellant ceased to be the holder in due course and considering all these aspects, the trial court rightly dismissed the complaint. He submitted that admittedly the dates were altered and in the statutory notice, there was no whisper regarding alteration of dates and only in the complaint, it was stated that the accused were not able to make the payment within due dates and therefore, they extended the period by altering the dates in the Cheques and that was falsified by the evidence of P.W. 1 who admitted that the Cheques were discounted with the financiers and the appellant received money from the financiers, the amount mentioned in the Cheques and even though, it was stated that the appellant repaid the financiers the amount they received, there was no proof adduced by the appellant to that effect. Therefore, having regard to definition of Holder in due course, it cannot be stated that the appellant is the Holder in due course entitled to maintain action. He submitted that a perusal of the various cheques and the endorsements made thereon would prove that the Cheques were presented earlier for collection and the Cheques were endorsed in favour of the financiers and thereafter, the dates were altered and considering the material alteration, the Cheques became stale and invalid and also considering the fact that there were material alterations in the Cheques, the trial Court rightly dismissed the complaint. He also submitted that the statutory notice was not issued by the holder in due course and under proviso "b" of Section 138 of the N.I. Act, the payee or the holder in due course of the cheque, shall make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. Admittedly, the statutory notice was issued by Murugan as Power agent of the appellant and no power document was produced and the said Murugan was not examined and in the absence of production of power, the notice issued by one Murugan who was neither a payee nor a holder in due course, was not a valid notice and on that ground also, the trial Court rightly dismissed the complaint. He therefore submitted that even assuming that the respondents were not able to rebut the presumption by giving evidence that they have not purchased yarn from the appellant and the Cheques were given as security, having regard to the admission of P.W. 1 that the Cheques were discounted with the financiers and the appellant received the money from the financiers, the appellant was not a holder in due course and the Cheques were materially altered by changing dates, the trial Court rightly dismissed the complaint, there is no need to interfere with the order of the trial Court.
(3.) ON the basis of the submission of the learned counsel appearing for both sides, the following points arise for consideration: - - (i) Whether the appellant is entitled to maintain action as a payee or a holder in due course? (ii) Whether there are material alterations in the Cheques regarding the dates? (iii) Whether the statutory notice given by the appellant is a valid one?;