IN THE HIGH COURT OF KERALA AT ERNAKULAM
Crl.Rev.Pet.No. 3257 of 2007()
1. SOWPARNIKA ARTS,
... Petitioner
2. JAYASHANKER M., AGED 39 YEARS,
3. V.M.NOUSHAD, AGED 39 YEARS,
4. A.U.SABUDHEEN, AGED 37 YEARS,
Vs
1. SHENOY CINEMAX,
... Respondent
2. STATE OF KERALA, REPRESENTED BY
For Petitioner :SRI.PHILIP T.VARGHESE
For Respondent :PUBLIC PROSECUTOR
The Hon'ble MR. Justice V.RAMKUMAR
Dated :25/06/2008
O R D E R
V. RAMKUMAR, J.
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Crl.R.P. No. 3257 of 2007
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Dated: 04-07-2008
ORDER
In this Revision filed under Section 397 read with Sec. 401
Cr.P.C. the revision petitioners consisting of a partnership firm
by name Sauparnika Arts and its three partners who were
respectively A1 to A4 in S.T. No. 1769 of 2003 on the file of the
Chief Judicial Magistrate’s Court, Ernakulam, challenge the
conviction entered and the sentence passed against them
concurrently by the Courts below for an offence punishable
under Section 138 of the Negotiable Instruments Act, 1881
(hereinafter referred to as “the N.I. Act” for short). The first
respondent herein namely M/s. Shenoy Cinemax which is also a
partnership firm was the complainant in the above case. The
cheques which were the subject matter of these proceedings
were Exts.P2 and P3 covering a total amount of Rs.
36,00,000/-.
2. I heard Adv. Philip T. Varghese the learned counsel
appearing for the revision petitioners and Adv. Sri. A.V. Thomas,
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the learned counsel appearing for the complainant.
3. Adv. Sri. Philip T. Varghese, the learned counsel
appearing for the revision petitioner made the following
submissions before me in support of the revision:-
The complainant had conveniently omitted to produce
Ext.D1 original agreement dated 21-6-2002 and Ext.D3
supplementary agreement dated 16-5-2003. The non-production
of those agreement by the complainant was willful. Those
agreements will clearly show that there was no necessity for the
accused to issue Exts. P2 and P3 cheques to the complainant.
The Courts below failed to see that the transaction between the
complainant and the accused was solely on the basis of the
terms and conditions stipulated in Ext. D1 agreement and Ext.P3
supplementary agreement. Those agreements will further show
that the case of the complainant that an additional loan of Rs. 20
lakhs was taken by the accused is improbable, if not false. The
courts below overlooked the fact that Exts.P11 to P14 letters
allegedly sent by the accused to the complainant were fabricated
for the purpose of this case after those signed papers and the
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two signed cheques which were entrusted with DW2, (the
financier) were treacherously procured by the complainant. The
courts below have ignored the fact that the complainant has
failed to prove the payment of Rs. 12 lakhs to M/s. Prasad Film
Laboratory , Thiruvananthapuram. The courts below ought to
have found that Exts. D1 to D10 and the testimony of DW1 have
the effect of improbabilising, if not falsifying the case of the
complainant and that the accused had thereby rebutted the
presumptions under Sec. 118 and Sec. 139 of the N.I. Act. The
courts below erred in finding that over and above the liability
under Exts. D1 and D3, the accused had incurred an additional
liability of Rs. 36 lakhs. The courts below failed to see that there
were sufficient circumstances to show that Exts.P2 and P3
cheques were issued as signed blank cheques to the financier
namely M/s. Ashok Investments, Chennai and the complainant
had in collusion with the financier got possession of those
cheques and filed the present case after converting those signed
blank cheques into Exts.P2 and P3 cheques and after concocting
the signed papers given in the letter-head of the accused into
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Ext.P11 to P13 letters. The courts below ought to have found
that the contents of Ext.P15 letter reveals that it is a false
document.
4. I am afraid that I cannot agree with the above
submissions.
5. What has been unravelled by the averments in the
complaint and the oral and documentary evidence adduced in the
case is the following:-
The complainant is a partnership firm by name Shenoy
Cinemax engaged in the distribution and exhibition of films. The
first accused is also a partnership firm by name Souparnika Arts
engaged in the production and distribution of films. Accused Nos.
2 to 4 are the partners of the first accused firm. On 21-6-2002
the complainant and the accused entered into Ext.D1
agreement whereunder the accused agreed to assign the
distribution rights of a Malayalam movie by name “Sadanandante
Samayam” which was being produced by the accused staring
Dileep, Kavya Madhavan and others. The said movie was to be
released in the month of December 2002. The total
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consideration agreed upon for the assignment of the distribution
rights of the above feature film in the State of Kerala was Rs. 95
lakhs out of which Rs. 81 lakhs was to be paid as advance
before the release of the movie and the balance amount of Rs. 14
lakhs was to be paid after the release of the movie to be spent
for the purpose of publicity etc. The 2nd accused examined as
DW1 has admitted that the accused received the advance amount
of Rs. 81 lakhs as provided under Ext.D1 agreement. In the said
agreement the accused had asserted that they are the full and
absolute owners of the distribution rights of the feature film and
that no other party had any right, lien, charge or claim
whatsoever in respect of the said movie. The agreement also
provided that the accused would settle all the claims of the
artists , technicians, outdoor units, labs etc. and would keep the
said picture free from any claims whatsoever. However, the
production of the film got delayed due to reasons attributable to
the accused and release of the movie was re-scheduled on 16-5-
2003. On 10-5-2003 the accused as per Ext.P11 letter
requested the complainant to pay Rs. 16 lakhs i.e. 12 lakhs to
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clear the dues to Prasad Laboratory, Thiruvananthapuram and
Rs. 4 lakhs for post – production works. Although the
complainant had parted with the sum of Rs. 81 lakhs as promised
under Ext.D1 agreement, considering the the assurance given by
the accused that the additional amount of Rs. 16 lakhs would be
paid within one month of the date of the release of the movie,
the complainant paid the further amount of Rs. 16 lakhs by
paying Rs. 4 lakhs by way of cheque on 10-5-2003 directly to the
accused and arranging Rs. 12 lakhs to be paid to Prasad Lab on
16-5-2003 through Kairali Theatres which owed amounts to the
complainant. The said payment was also by means of cheques.
At that time also the accused had assured the complainant that
there was no other charge or lien over the film in favour of any
other person and that the movie could be released without any
impediment. On 13-5-2003 the accused informed the
complainant as per Ext.P12 letter that in April 2003 they had
borrowed money from Ashok Investments, a financier at
Chennai represented by DW2 by pledging the negatives of the
movie and a sum of Rs. 20 lakhs was due to Ashok
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Investments. The accused thus placed the complainant in such a
predicament that without clearing the dues in favour of Ashok
Investments the film could not be released. Left with no option,
the complainant was compelled to pay the additional sum of Rs.
20 lakhs to the financier in the hope of getting the movie
released soon. Ext.D3 supplementary agreement dated 16-5-
2003 was executed between the accused and the complainant
specifically referring to Ext.P12 letter. The Annexure to the said
agreement showed publicity expenses of Rs. 19.5. lakhs. On 16-
5-2003 the accused gave Ext.P13 letter dated 16-5-2003 along
with which Ext.P2 post-dated cheque bearing the date 21-6-
2003 for Rs. 20 lakhs and Ext.P3 post – dated cheque bearing
the date 21-6-2003 for Rs. 16 lakhs, were enclosed. As per
Ext.P14 letter dated 20-5-2003 the accused informed the
complainant with reference to Ext.D3 supplementary agreement
that they are unable to undertake the newspaper publicity
directly and requested the complainant to do the newspaper
advertisement for the film which was being released on 22-5-
2003. In this letter the accused have confessed that they are
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very well aware of the implications which may follow consequent
on their committing breach of agreement . On 22-5-2003 the
film was released. Ext.D5 is a lawyer notice sent on behalf of
the accused to DW2 the proprietor of Ashok Investments stating
that the accused had availed a financial assistance of Rs. 20 lakhs
from DW2 by pledging the negative of the film “Sadanandande
Samayam” in favour of DW2 and at that time certain signed
stamp papers, signed letter-heads, promissory notes, blank
signed cheque leaves etc. had been entrusted with DW2 as
demanded by him, that subsequently the accused had entered
into Ext.P3 supplementary agreement with the complainant
herein who had agreed to settle the entire amount of Rs. 20
lakhs due to DW2 directly and that the complainant herein had
accordingly settled the entire dues. In that lawyer notice, a
demand was made for return of the documents entrusted with
D.W.2 at the time of availing of the loan. On 21-6-2003 the
complainant sent Exts.P2 and P3 cheques for payment to the
drawee bank. As per Exts.P4 and P5 dishonour memos both
dated 24-6-2003 Exts. P2 and P3 cheques were dishonoured by
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the drawee bank. On 25-6-2003 Ext. P6 statutory notice was
issued by the complainant to the accused. In the meanwhile, on
25-6-2003 the accused gave Ext.P15 receipt to D.W.2
acknowledging receipt of the documents which were entrusted
with DW2 while availing of the loan of Rs. 20 lakhs.
Eventhough the 2nd accused examined as DW1 had deposed that
the accused did not receive back the documents entrusted with
the financier, DW2 the financier who was examined as a defence
witness categorically stated that all the documents were returned
to the accused and Ext.P15 is the receipt issued in the
handwriting and under the signature of the accused in that
behalf. Exts.P7 to P9 are the postal acknowledgment cards dated
27-6-2003, 28-6-2003 and 27-6-2003 respectively evidencing
due service of Ext.P6 statutory notice on A2 to A4 respectively
who are the three partners of the first accused firm. Ext.P10 is
the unclaimed returned envelop containing Ext.P6 statutory
notice sent to the first accused firm. The complaint was filed on
8-7-2003 before the Chief Judicial Magistrate, Ernakulam.
5. The defence argument that Exts. P11 to P14 are
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documents which were concocted using the blank signed letter-
heads given by the accused to DW2 while availing of the loan of
Rs. 20 lakhs, cannot be accepted for a moment. Ext.P15 is the
receipt signed by all the three partners of the first accused firm
acknowledging receipt of the documents which were entrusted by
them to DW2 while availing of the loan of Rs. 20 lakhs. If the
accused had received back from DW2 all the documents
entrusted by them with DW2, there is no possibility for the
complainant to have access to those documents nor convert four
of the signed letter-heads into Exts.P11 to P14. It is true that
Exts.P11 to P14 contain the signatures of all the three partners.
But it is pertinent to notice that none among accused Nos. 2 to 4
is a managing partner and that may be the reason why all the
partners have signed in those letters. In Ext.P15 receipt also,
all the three partners have signed. DW2, the financier who was
examined on the side of the accused did not support the defence
versions. On the contrary, he deposed that it was the
complainant who discharged the loan of Rs. 20 lakhs availed by
the accused. The alleged conspiracy or collusion between the
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complainant and DW2 is nothing but a cock and bull story
conceived of by the accused to wriggle out of their liability. The
courts below have carefully evaluated the oral and documentary
evidence in the case to arrive at the conclusion that the accused
have committed the offence as alleged. The conviction recorded
against the revision petitioners/accused does not call for any
interference and is confirmed.
6. What now survives for consideration is the question as
to whether the sentence imposed on the revision petitioners is
sustainable or not . The trial court had imposed a fine of Rs.
10,000/- on the first accused and on default to pay the fine to
suffer simple imprisonment for three months. Accused Nos. 2 to
4 were each sentenced to simple imprisonment for six months
and to pay fine of Rs. 12 lakhs and on default to pay the fine to
undergo simple imprisonment for six months each. The total
fine amount of Rs. 36,00,000/- (Rupees thirty six lakhs only)
imposed on A2 to A4 as and when realised was directed to be
paid to the complainant as compensation under Sec. 357 (1)(b)
Cr.P.C. The lower appellate court modified the sentence deleting
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the default sentence imposed on the first accused. The lower
appellate court also reduced the substantive sentence of
imprisonment awarded to accused Nos. 2 to 4 from six months
to one month. I do not think that penal servitude by way of
incarceration is necessary in a prosecution of this nature.
Accordingly, the sentence imposed on revision petitioners 2 to 4
(A2 to A4) is modified. A2 to A4 shall each pay a fine of Rs. 12
lakhs and on default to pay the fine the defaulting accused shall
undergo simple imprisonment for three months. A2 to A4 are
given four months time from today to pay to the complainant
direct or to deposit the fine amount before the trial court. The
sentence imposed on the first revision petitioner/ first accused is
not interfered with. The first accused is given three months time
to deposit the fine amount before the trial court.
In the result this revision is dismissed confirming the
conviction but modifying the sentence as above
V. Ramkumar, Judge.
ani/
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ani/
