IN THE HIGH COURT OF KERALA AT ERNAKULAM
CRL.A.No. 183 of 2002(A)
1. CONCORD LEASING & HIRE PURCHASE PVT.
... Petitioner
Vs
1. P.BHARGAVAN, S/O. NARENDRAN,
... Respondent
2. THE STATE OF KERALA,
For Petitioner :SRI.JACOB ABRAHAM
For Respondent :PUBLIC PROSECUTOR
The Hon'ble MR. Justice S.S.SATHEESACHANDRAN
Dated :27/07/2009
O R D E R
S.S. SATHEESACHANDRAN, J.
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Crl.A.No.183 of 2002
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Dated: 27th July, 2009
JUDGMENT
Complainant is the appellant. The appeal is filed challenging the
order of acquittal rendered in favour of the first respondent(accused)
by the Sessions Judge, Kozhikode reversing the conviction and
sentence imposed against him by the trial magistrate for the offence
punishable under Section 138 of the Negotiable Instruments Act
(hereinafter referred to as ‘the N.I.Act’).
2. Short facts involved in the appeal may be summed up thus:
The complainant is a private company engaged in the business
advancing finances on lease and hire purchase agreements. Towards
the sum collected as loan, executing 10 promissory notes covering a
period from 15.1.994 to 21.7.1994, for various sums, and in
discharge of the debt and liability thereunder, the accused issued
Ext.P1 cheque for a sum of Rs.3,09,149/- promising its encashment
on presentation in due course is the case of the complainant. The
cheque presented was, however, dishonoured due to insufficiency of
funds in the account maintained by the accused. Statutory notice
issued intimating dishonour and demanding the sum covered by the
cheque not being responded with payment the complainant launched
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prosecution against the accused for the offence under Section 138 of
the N.I.Act filing a complaint. The accused, on appearance, pleaded
not guilty when the particulars of the offence were made known.
Complainant examined P.W.1 to P.W.4 and got marked Exts.P1 to
P22 to prove its case. The accused questioned under Section 313
Cr.P.C. reiterating his plea of innocence submitted that the
documents produced by the complainant are forged and before
entering into the money transaction with the complainant a signed
cheque in blank form was collected from him, that subsequent loans
were given only on discharge of the previous loan, that demand for
returning the promissory notes which had been collected earlier in
blank form with signature alone were declined on the pretext that
they had been destroyed, and that no receipt was issued by the
complainant on discharge of the earlier loan. In support of his
defence, he produced Exts.D1 to D4. The learned trial magistrate,
after appreciating the materials produced, accepting the case of the
complainant found the accused guilty of the offence, and he was
thereupon convicted and sentenced to pay a fine of Rs.3,25,000/-
with default term of simple imprisonment for three months. In the
appeal preferred by the accused against the conviction and sentence,
after reappreciating the evidence and on hearing the counsel on both
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sides, the learned Sessions Judge set aside the conviction and
sentence and acquitted him of the offence. Correctness and legality
of the order of acquittal so rendered by the learned Sessions Judge is
challenged in this appeal by the complainant.
3. I heard the learned counsel on both sides.
4. Learned counsel for the complainant contended that the
lower appellate court misread and misappreciated the evidence and
applied wrong principles of law to enter an order of acquittal in favour
of the accused, reversing the conviction founded against him by the
trial magistrate. The accused had admitted of the execution of the
cheque though he had denied the execution of the promissory notes
when the loan amounts were collected, submits the counsel. The
accused had also admitted, according to the learned counsel, the
receipt of money from the complainant, but setting up a different
version over the transaction. When that be the case, the lower
appellate court was not justified, according to the learned counsel, in
interfering with the conviction imposed against the accused by the
trial magistrate for the solitary reason that the handwritings in Ext.P1
cheque as to the entries made therein differ from the signature
subscribed which was admitted by the accused. The defence
canvassed by the accused built upon the different handwritings seen
Crl.A.No.183/02 – 4 –
in filling up of Ext.P1 cheque is not worthy of any merit in the given
facts of the case, contends the counsel placing reliance on Lillykutty
v. Lawrance (2003(3) KLT 721) wherein it has been held that where
the handwriting of the payee’s name and the amount shown in the
cheque differ from the handwriting of the drawer of the cheque it is
not a ground to hold that it was not validly issued or the cheque was
not duly executed. Learned counsel contended that when receipt of
money and handing over of a signed cheque to the complainant is
admitted by the accused, the burden was on the accused to show
that it was handed over in blank form and there was no due
execution of the instrument. The accused having not let in any
positive evidence in support of that defence, it deserved only to be
discarded as meritless, submits the counsel. Learned counsel,
therefore, urged for setting aside the order of acquittal rendered in
favour of the accused by the learned Sessions Judge and restoring
the conviction passed against the accused by the learned trial
magistrate by allowing this appeal. On the other hand, learned
counsel for the accused supporting the impugned judgment of the
learned Sessions Judge contended there there is no merit in the
appeal and the materials produced in the case have unerringly
established that the complainant had launched prosecution against
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the accused forging various instruments even making false entries in
Ext.P1 cheque which had been obtained from the accused in blank
form with the signature alone. The accused had denied the execution
of the cheque and in the given facts of the case without proving due
execution of the instrument which the complainant has miserably
failed, no conviction against the accused is permissible, submits the
counsel. Previous notice issued by the complainant demanding the
sum covered by the promissory notes without referring to Ext.P1
cheque is also highlighted by the learned counsel to contend that the
defence version is more probable and the case of the complainant is
unworthy of acceptance. The appeal filed by the accused impeaching
the correctness of the order of acquittal passed by the lower appellate
court, according to the learned counsel for the accused, lacks merit,
and it is liable to be dismissed.
5. The primary question that emerges for consideration is
whether the lower appellate court was correct in interfering with the
conviction founded against the accused by the trial magistrate taking
a different view from that of the magistrate after reappreciating the
materials tendered in the case. After going through the judgments of
the trial magistrate and also the lower appellate court with reference
to the materials tendered and the submissions made by the learned
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counsel on both sides, I find that the reversal of the conviction and
rendering an order of acquittal by the learned Sessions Judge in the
appeal is proper, valid and unimpeachable. The case of the
complainant is that the accused executed 10 promissory notes over a
period of nearly six and half months, for various sums, during which
loans were availed, and later in discharge of the liability thereunder
he issued Ext.P1 cheque for a sum of Rs.3,09,149/-. It is interesting
to note that out of the ten promissory notes, the first nine of them for
the sum ranging from Rs.6000 to Rs.45,000 were advanced over a
period of 15.1.1994 to 11.2.1994. The last two of the above nine
pronotes were on the same date, i.e. 11.2.1994, for sums of
Rs.13,000 and Rs.15,000. The transaction covered by the 10th
promissory note was on 21.7.1994 for a sum of Rs.1,80,000/-. To
prove the loan transactions with the accused the complainant
produced pronotes, eleven in number, Exts.P9 to P19, and examined
its power of attorney, a bill collector of the company. In the complaint
the case of the complainant was that the accused borrowed
Rs.4,91,000/- through ten different promissory notes with different
dates and towards discharge of the liability the accused issued Ext.P1
cheque for a sum of Rs.3,09,149/- promising its encashment on
presentation and agreeing to pay the balance amount due within one
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year. There is no whisper in the complaint that any of the amount
covered by the promissory note had been discharged by the accused.
But when evidence was let in one more promissory note (Ext.P12),
over and above the ten promissory notes stated in the complaint, for
a sum of Rs.40,000/- was produced. Ext.P12 promissory note is
dated 24.1.1994. In the complaint giving the particulars of ten
promissory notes with specific sums thereunder the complainant has
alleged that the accused borrowed a sum of Rs.4,91,000/- and
towards partial discharge of that liability, Ext.P1 cheque was issued
for a sum of Rs.3,09,149/-. Particulars of the pronotes with the sum
and date as alleged in the complaint are as hereunder:
1. Pronote for a sum of Rs.30,000/- dated 15.1.1994.
2. Pronote for a sum of Rs.15,000/- dated 18.1.1994.
3. Pronote for a sum of Rs.40,000/- dated 20.1.1994.
4. Pronote for a sum of Rs.30,000/- dated 28.1.1994.
5. Pronote for a sum of Rs.6,000/- dated 31.1.1994.
6. Pronote for a sum of Rs.40,000/- dated 3.2.1994.
7. Pronote for a sum of Rs.45,000/- dated 7.2.1995.
8. Pronote for a sum of Rs.30,000/- dated 11.2.1994.
9. Pronote for a sum of Rs.15,000/- dated 11.2.1994.
10.Pronote for a sum of Rs.1,80,000/- dated 21.7.1994.
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The total amount as under the above promissory notes comes to
Rs.4,31,000/-. Obviously, the statement in the complaint with regard
to the pronote for Rs.45,000/- (Sl.No.7) showing the date as
7.2.1995 might be a mistake, for the correct date of 7.2.1994.
6. Pronotes produced, 11 in number, and exhibited as Exts.P9
to P19 to prove the loan transactions of the complainant leading to
issue Ext.P1 cheque disclose of material discrepancy with the
particulars of pronotes and sum stated in the complaint. The
particulars of pronotes exhibited as Exts.P9 to P19 are thus:
1. Ext.P9 pronote for Rs.30,000/- dated 15.1.1994.
2. Ext.P10 pronote for Rs.15,000/- dated 18.1.1994.
3. Ext.P11 pronote for Rs.40,000/- dated 20.1.1994.
4. Ext.P12 pronote for Rs.40,000/- dated 24.1.1994.
5. Ext.P13 pronote for Rs.50,000/- dated 28.1.1994.
6. Ext.P14 pronote for Rs.6,000/- dated 31.1.1994.
7. Ext.P15 pronote for Rs.40,000/- dated 3.2.1994.
8. Ext.P16 pronote for Rs.45,000/- dated 7.2.1994.
9. Ext.P17 pronote for Rs.30,000/- dated 11.2.1994.
10.Ext.P18 pronote for Rs.15,000/- dated 11.2.1994.
11.Ext.P19 pronote for Rs.1,80,000/- dated 21.7.1994.
The total sum as covered under these 11 pronotes (Exts.P9 to P19)
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comes to Rs.4,81,000/-. It has to be noted that the pronote covered
by Ext.P12 Rs.40,000/- dated 21.1.1994 is not included among the
pronotes stated in the complaint. Similarly, Ext.P13 pronote dated
28.1.1994 is for a sum of Rs.50,000/- whereas in the complaint
pronote dated 28.1.1994 is for a sum of Rs.30,000/-.
7. The discrepancies as above with regard to the pronotes as
stated in the complaint with reference to the pronotes exhibited,
Exts.P9 to P19, and the total sum calculated thereunder, could not be
treated as inadvertent mistakes in drafting of the complaint and
making reference to the pronotes with respective sums, is borne out
by Ext.P20 agreement purported to have been executed by the
accused acknowledging his liability for a sum of Rs.3,09,149/-, the
sum shown in Ext.P1 cheque. Ext.P20 agreement is dated 14.5.1994.
No reference to Ext.P20 agreement, leave alone the circumstances
under which it was executed, is stated in the complaint. Complainant
has examined one of the witnesses in Ext.P20 agreement, P.W.3 to
prove its execution by the accused. The evidence of that witness in
no way improves the case of the complainant when the circumstances
surrounding Ext.P20 agreement are examined. Before going into that
question, particulars stated in Ext.P20 agreement with reference to
the account numbers and the sum covered by the loan transactions
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with the accused have to be looked into, which read thus:
A/c No. Issued on Amount Balance on 14.5.1994
1200/94 15.1.1994 30,000.00 28,149.00
1202/94 18.1.1994 15,000.00 15,000.00
1204/94 20.1.1994 40,000.00 40,000.00
1206/94 24.1.1994 40,000.00 40,000.00
1208/94 28.1.1994 50,000.00 50,000.00
1210/94 31.1.1994 6,000.00 6,000.00
1212/94 03.2.1994 40,000.00 40,000.00
1215/94 07.2.1994 45,000.00 45,000.00
1216/94 11.2.1994 30,000.00 30,000.00
1218/94 11.2.1994 15,000.00 15,000.00
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3,09,149.00
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The total sum shown in the agreement as due from the accused on
the date of agreement is Rs.3,09,149/-.
8. Whereas in the complaint, it is alleged that the transaction
covered by Ext.P19 pronote for Rs.1,80,000/- dated 21.7.1994 also
formed part of the liability covered by Ext.P1 cheque in evidence
through P.W.!, the power of attorney holder, the complainant
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projected a case that transaction was different and did not form part
of the sum covered by Ext.P1 cheque which was issued towards
partial discharge of the liability in respect of the previous
transactions alone. In other words, the case developed by the
complainant in evidence is based on Ext.P20 agreement and Exts.P9
to P18 pronotes excluding Ext.P19 pronote advancing a case that
after adjustment of the payment made by the accused under Ext.D4
receipt in Ext.P9 promissory note, for the balance sum outstanding
under the transaction covered by Exts.P9 to P18 pronotes Ext.P1
cheque for a sum of Rs.3,09,149/- was issued by the accused. In this
context, the date of execution of Ext.P20 agreement which stand
disputed by the defence advanced by the accused that signed cheque
in blank form and pronotes and stamped papers, all in blank form,
had been collected by the complainant-company, assumes much
significance. Ext.P20 agreement is dated 14.5.1994. Long before
filing the complaint, the complainant had issued an advocate notice
dated 23.11.1994 to the accused in respect of which no reference is
made in the complaint. That notice is produced by the accused and
exhibited as Ext.D1. In Ext.D1 notice, the complainant has set forth a
claim of Rs.4,89,149/- from the accused towards the liability arising
under the loan transactions making reference to the various pronotes
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and also an agreement purported to have been executed by him
acknowledging his liability. To that notice the accused gave a reply
through an advocate disputing the agreement alleged acknowledging
liability and the execution of the pronote for Rs.1.80,000/- on
21.7.1994, while admitting that he had some money transactions
with the complainant. Ext.P21 is that reply notice given by the
accused. After receiving Ext.P21 reply, the complainant has filed the
present complaint long thereafter, on the basis of Ext.P1 cheque
without making any reference to the previous notice issued and the
reply from the accused disputing the liability. After sending a reply
covered by Ext.P21 disputing the liability specifically, denying the
execution of Ext.P20 agreement and also Ext.P19 pronote for a sum
of Rs.1,80,000/-, if the case of the complainant were to be believed,
the accused gave Ext.P1 cheque towards discharge of the liability for
the pronotes covered by Exts.P9 to P18, nearly four months after
sending Ext.P21 reply notice. Whether it is so, of course arise for
consideration if only the complainant has presented such a case with
specific particulars thereof in the complaint. That was not done. Still
examining such a possibility, the reply notice sent by the accused
when intimation of dishonour of Ext.P1 cheque was issued is crucial
and of vital importance. Complainant has not produced and exhibited
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copy of the notice sent to the accused on dishonour of Ext.P1 cheque.
The reply notice sent by the accused through his advocate is
produced and exhibited as Ext.P7 in evidence. He has specifically
contended that a cheque in blank form was issued as demanded by
the complainant on 19.2.1994 and forging false entries in that
instrument, the notice had been issued by the complainant. He has
also referred to the previous reply notice sent by him in response to
the earlier notice given by the complainant. The reply notice further
show that he had filed caveat petitions before the civil court
anticipating institution of suits by the complainant to get advance
notice from the court before passing of any interim orders in such
proceedings. The issuance of advocate notice earlier and reply
received thereof from the accused, with the surrounding
circumstances, disclose that the defence canvassed by the accused
that the cheque was collected with his signature in blank form is more
probable and it, further, discredits the version presented by the
complainant in his evidence of which particulars are not furnished in
its complaint.
9. The facts and circumstances involved in the case as referred
to above, would indicate that an adjudication by a civil court
regarding the liability of the accused in respect of the transaction
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which he had with the complainant by instituting a proper suit before
the appropriate court was necessary and unavoidable, and a
complaint under Section 138 of the N.I.Act on Ext.P1 cheque alleged
to have been executed by the accused, which was flatly denied by
him, was not advisable nor proper. The sum covered by one among
the promissory notes is not covered by Ext.P1 cheque is the version
of P.W.1, the power of attorney of the complainant, and which is that
promissory note has not been stated or explained in evidence.
Complainant has a further case that in addition to the promissory
notes, the accused had also executed an agreement dated 14.5.1994
acknowledging its liability under Exts.P9 to P18 promissory notes for
a sum of Rs.3,09,149/-, the amount covered by the cheque. The
accused had paid a sum of Rs.1851/- as covered by Ext.D4 receipt
and that was given credit to in the amount due and for the balance
sum of Rs.3,09,149/- Ext.P1 cheque was issued, is the conclusion
formed by the learned trial magistrate. Strangely enough, no such
case was alleged in the complaint nor deposed in evidence by P.W.1,
the power of attorney holder of the complainant. On the contrary,
when P.W.1 was examined, it has come out, the complainant had
issued an advocate notice dated 23.11.1994 claiming an amount of
Rs.4,89,149/-. The evidence of P.W.1 would show that the
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complainant is a private limited company which is advancing finance
for vehicles on furnishing security. The most interesting aspect is that
though a series of promissory notes had been produced, Exts.P9 to
P19 covering a period of over six months, if the case of the
complainant were to be believed when Ext.P1 cheque was issued
towards discharge of the liability under ten promissory notes out of
the eleven pronotes, after giving credit to the amount under Ext.D4
receipt in Ext.P9 pronote, not even a single pai was claimed by the
company towards interest on the finance advanced. This has to be
viewed in the backdrop that the promissory notes Exts.P9 to P19
pronotes specifically state that the sum due is realisible with 24%
interest per annum. A company advancing finances for purchase of
vehicles after getting pronotes for the sum advanced with the liability
to pay interest as stated above, was satisfied with the principal sum
alone under the notes by collecting a cheque for such sum alone
seems to be the case of the complainant if its case is to be accepted,
which can be taken only with a pinch of salt.
10. The above circumstances viewed with another vitiating
factor discrediting the complainant’s case as a whole, as noticed by
the learned Sessions Judge, related to the writings on Ext.P1 cheque.
The learned Sessions Judge has taken note that the admission of
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P.W.1, the power of attorney holder, that the entries in the cheque
are made in three different writings. It was further noticed that the
handwritings in the entries varied. P.W.1 would state that the
manager of the company wrote the entires in Ext.P1 cheque, but it
was signed by the accused in the presence of the Managing Director
by the accused. Neither the manager nor the managing director was
examined in the case to prove the due execution of Ext.P1 cheque by
the accused despite his specific contention that blank signed cheque
and blank stamped promissory notes had been obtained by him for
providing finance and, later, when repayments were made, the
pronotes were not returned on the pretext that they were destroyed.
The learned Sessions Judge, after appreciating the materials
produced, concluded that due execution of Ext.P1 cheque by the
accused has not been proved by the complainant and therefore the
conviction imposed against him by the trial magistrate was liable to
be reversed. Accordingly, setting aside his conviction, the learned
Sessions Judge acquitted the accused of the offence. I do not find any
impropriety in the conclusion drawn and the findings so arrived by the
learned Sessions Judge in the given facts of the case.
11. There is no merit in the submission of the learned counsel
for the complainant that the burden was on the accused as he had
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admitted of handing over a signed cheque and receiving of finance
from the company. Ext.P1 cheque was duly executed by the accused
has to be established by the complainant giving cogent and reliable
evidence in the light of the defence canvassed that it was given in
blank form with signature alone, and more particularly, on the
materials presented by the complainant company prima facie
indicating that the transactions relating the issue of the cheque was
towards the principal sum covered by the promissory notes alone is
unbelievable without convincing proof. The decision relied by the
learned counsel for the appellant, namely, Lillykutty v. Lawrance
(2003(3) KLT 721) has no application to the facts of the present case
where the case of the complainant is found seen discredited not only
by the difference in the writings on the instrument, but due to various
other vitiating circumstances referred to earlier. The apex court in
Narayana Menon v. State of Kerala [2006(3) KLT 404(SC)] has
held that to rebut the presumption covered by the N.I.Act, what is
needed is to raise a probable defence. For the said purpose, it is
stated the accused need not adduce any evidence, but could show
that his defence is probable on the materials tendered by the
complainant itself. Whether the accused has discharged that burden,
it has been stated by the apex court, would be a question of fact
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depending upon the facts and circumstances involved in the case. In
the present case not only that the due execution of Ext.P1 cheque by
the accused was not established by the complainant but on the
materials produced by the complainant itself it is shown that the
defence canvassed by the accused that blank signed cheque and
blank promissory notes had been collected by the complainant
company at the time of providing finance is probable. In such
circumstances, the order of acquittal passed by the learned Sessions
Judge reversing the conviction rendered against him by the trial
magistrate is unimpeachable.
The appeal is devoid of any merit and it is dismissed.
srd S.S. SATHEESACHANDRAN, JUDGE