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TMI Blog2024 (8) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, was upheld. BRIEF FACTS : 4. The sole Respondent (hereinafter also referred to as the "accused"), being a subscriber of the Appellant-chitfund company (hereinafter also referred to as the "complainant"), borrowed loan amounts on several dates from the Appellant over a period of about two years which swelled to a sum of Rs.21,09,000/- (Rupees Twenty One Lakhs and Nine Thousand) including interest, after eight years. The loans were advanced in the following manner: Rs.1,50,000/- (Rupees One Lakh and Fifty Thousand) was given on 09.03.1995; Rs.6,00,000/- (Rupees Six Lakhs) on 29.12.1995; Rs.1,00,000/- (Rupees One Lakh) on 22.03.1995; Rs.3,00,000/- (Rupees Three Lakhs) on 11.03.1996; Rs.1,00,000/- (Rupees One Lakh) on 09.04.1997; and finally, Rs.2,00,000/- (Rupees Two Lakhs) on 24.04.1997. In order to partly discharge the aforesaid loan amounts, Cheque No.0150573 dated 03.02.2003 was issued by the accused for a sum of Rs.19,00,000/- (Rupees Nineteen Lakhs) in favour of the complainant drawn on Indian Overseas Bank, District Court Extension Counter, Coimbatore. The complainant, on 04.02.2003, presented the cheque in Bank of India, Kurichi Industrial Estate Branch, Coimbatore which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked. On behalf of the accused, no witness was examined, however, five exhibits were marked. The learned Trial Court, after perusing the evidence on record and hearing the parties, passed judgment dated 16.08.2010 whereby it convicted the accused for the offence under Section 138, N.I. Act and sentenced him to undergo one year simple imprisonment and to pay a fine of Rs.38,00,000/- (Rupees Thirty Eight Lakhs) as compensation to the complainant. 6. The accused filed Criminal Appeal No.186/2010 in the Appellate Court, challenging the conviction and sentence, along with a petition under Section 391 '391. Appellate Court may take further evidence or direct it to be taken.-(1) In dealing with any appeal under this Chapter, the Appellate Court, if it thinks additional evidence to be necessary, shall record its reasons and may either take such evidence itself, or direct it to be taken by a Magistrate, or when the Appellate Court is a High Court, by a Court of Session or a Magistrate. (2) When the additional evidence is taken by the Court of Session or the Magistrate, it or he shall certify such evidence to the Appellate Court, and such Court shall thereupon proceed to dispose of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce amount is calculated at the rate of 3% per month. 10. It was submitted that the issue of interest was not a matter to be decided and even the learned Trial Court has not disputed the principal amount. Further, learned counsel submitted that the learned Trial Court has also not accepted that the respondent was able to show that substantial amounts were returned. Thus, according to him, the dues still remained to be repaid against the respondent to be made good and so it cannot be said that the amount mentioned in the cheque which was returned was not a legally-due amount. Learned counsel submitted that on such flimsy and tenuous grounds, the amount which in law was due to the appellant from the respondent, for which the N.I. Act has been brought into existence by the Parliament so that such dues which the accused denies but for which cheques have been issued by him are not honoured, a quick procedure has been prescribed to ensure that financial disputes reach finality, has been totally frustrated by the Appellate Court and erroneously upheld by the High Court. For some receipts shown by the respondent as part re-payment of the loan amount, the contention of the appellant is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present appeal does not merit any consideration and sought its dismissal. ANALYSIS, REASONING AND CONCLUSION: 14. Having considered the rival contentions, we find that the impugned judgment upholding the order of the Appellate Court requires interference. 15. This Court in Dashrath Rupsingh Rathod v State of Maharashtra, (2014) 9 SCC 129 held that "An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank." The fact that the cheque was issued as a consequence of failure to repay the loan taken by the respondent from the appellant to which the interest was added would more or less settle the issue. However, in the present case, a discrepancy apropos the rate of interest, whether it be 1.8%, 2.4% or 3% per month was not sufficient to disbelieve the claim of the appellant. Though the respondent before the learned Trial Court had contended that there was no loan transaction between the parties, but still, before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote i.e., 1.8% per month would lead to the interest being 21.6% per annum, which also is above the cap of 12% per annum prescribed in the Tamil Nadu Act. Thus, if the parties amongst themselves, agreed to a rate which is not in conformity with the Tamil Nadu Act, it was for the respondent to raise an objection or move the appropriate forum for getting the same corrected/taken care of, so that the interest rate did not exceed 1% per month but having agreed to a rate of 1.8% per month, the subsequent amount of interest calculated @ 3% per month does not have much force for it was upon the respondent to challenge the rate of interest. The respondent also cannot be said to be a layman, and being a subscriber to a chitfund company, he is expected to be aware of the laws and also of what is beneficial for him. Having issued the pronotes, he cannot now take a plea in these collateral proceedings under the N.I. Act to contend that the rate of interest was more than what was permissible under the Tamil Nadu Act. 18. For reasons aforesaid, the Appellate Court's order as also the impugned judgment are set aside. The order of the learned Trial Court stands restored albeit with certain modific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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