IN THE HIGH COURT OF KERALA AT ERNAKULAM
CRL.A.No. 212 of 2004()
1. TOM JOSEPH, KALARIPARAMBIL HOUSE,
... Petitioner
Vs
1. KURIAN JOSEPH, MATHICHIPARAMBIL
... Respondent
2. THE STATE OF KERALA, REPRESENTED BY
For Petitioner :SRI.M.J.THOMAS
For Respondent :SRI.SABU GEORGE
The Hon'ble MR. Justice M.L.JOSEPH FRANCIS
Dated :22/12/2010
O R D E R
M.L. JOSEPH FRANCIS, J.
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Crl.A. No. 212 of 2004
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Dated this the 22nd day of December, 2010
JUDGMENT
This appeal is filed by the complainant in C.C.No. 1593 of
1998 on the file of the Addl. Magistrate of First Class No.II
Mobile Court, Kottayam (Camp sitting Changanacherry). The
first respondent herein was the accused in that case, which was
filed by the complainant alleging commission of the offence
under Section 138 of the N.I. Act.
2. Briefly the case of the complainant is as follows.
Towards the amount due to the complainant, the accused issued
Ext.P1 cheque. The complainant presented the above cheque for
encashment, but the same was dishonoured due to insufficiency
of funds. A registered lawyer notice was issued to the accused
demanding payment of the amount. Though the notice was
received by the accused, he did not repay the amount. Hence the
complaint.
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3. In the Magistrate Court, on the side of the complainant, PW1
was examined and Exts.P1 to P7 were marked. On the defence side,
Dws. 1 and 2 were examined and Exts.D1 to D5 were marked. The
learned Magistrate, on considering the evidence, found that it is
improbable that a huge amount of Rs.5,00,000/- was advanced by the
complainant to the accused during the period in which money as per
several other account were due to the complainant. On the other hand,
the case set up buy the accused that he has secured the prize money of
the chitty by executing blank signed cheques and promissory notes and
one of the above cheque has been miutilised by the complainant to
fabricate Ext.P1 document, appears to be correct. So it is found that
the accused has miserably failed to establish that Ext.P1 cheque has
been issued in discharge of a legally enforceable debt or liability.
Hence the offence under Section 138 of the N.I. Act is not attracted in
this case and the accused was found not guilty and acquitted under
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Section 255(1) Cr.P.C. Against that judgment of acquittal the
complainant filed this appeal.
4. Heard learned counsel for the appellant and the learned
counsel for the first respondent.
5. At the time of argument, learned counsel for the appellant
raised the following contentions. The court below went wrong in
acquitting the accused. The court below ought to have found that the
essential ingredients of the offence under Section 138 of the N.I. Act is
proved and the court below ought to have convicted the accused. The
version given by PW1 is probable and natural. Simply because
amounts are due from the accused to the complainant, the transaction
spoken to by PW1 is not improbable and the finding of the court
below is perverse. In the absence of any reliable evidence, the court
below ought to have found that the cheque is issued for the discharge
of a legally enforceable debt. The learned counsel for the first
respondent supported the judgment of the court below.
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6. The accused contended that Ext.P1 cheque was not issued in
discharge of any legally enforceable debt and it has been issued only
by way of security. It was only a blank cheque with the signature of
the accused. It is the definite case of the accused that the above
cheque has been issued as security for the prize money of certain
chitties conducted by the complainant, in which the accused was a
subscriber.
7. The complainant was examined as PW1. He deposed that he
had acquaintance with the accused and that the accused borrowed an
amount of Rs. 5 lakhs from him and when he demanded back that
amount, the accused issued Ext.P1 cheque. When PW1 presented that
cheque for encashment, it was dishonoured due to insufficiency of
funds in the account of the accused. Ext.P2 is the dishonour memo
and Ext.P3 is the intimation memo. PW1 sent a lawyer notice to the
accused, intimating the dishonour of the cheque and demanding the
amount. PW1 deposed that inspite of receipt of the lawyer notice, the
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accused did not repay any amount. Ext.P4 is the copy of the lawyer
notice and Ext.P5 is the postal acknowledgment. Ext.D3 is the copy
of the reply notice sent by the accused.
8. The certified extract of the savings back account ledger of the
accused is marked as Ext.P6. The cheque returned register maintained
in the bank, in which the accused is having account, is marked as
Ext.P7. From Exts.P6 and P7 it is clear that there was no sufficient
funds in the account of the accused to honour Ext. P1 cheque.
9. In cross examination PW1 admitted that he is conducting a
Kuri Company by name Kalariparambil Chitty Funds and Kuries and
that the accused was a subscriber to two chitties for a total amount of
Rs. 8 lakhs. PW1 deposed that the accused borrowed Rs. 5 lakhs in
two intalments, Rs. 3 lakhs in Ocrtober, 1997 and Rs. 2 lakhs in
December, 1997 and that he gave Rs. 5 lakhs not for getting interest.
PW1 admitted that the accused remitted the entire amount due from
him in the chittry transaction. PW1 denied the suggestion that he used
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to collect Promissory Notes and blank cheques while giving prized
amount of the chitty. Instead he said that he used to insist to get salary
certificate of Government servants and sale deeds as security. PW1
deposed that the accused signed Ext.P1 filled cheque in his presence.
PW1 admits that on 23.3.1996 the accused and his brothers and parents
borrowed Rs. 3 lakhs from him and for the realisation of that amount
he filed a suit as O.S.No. 301 of 1998 before the Sub Court, Kottayam
and that Ext.D2 is the copy of the plaint in that suit.
10. The accused was examined as DW1. According to DW1
when he bid the chitty conducted by the complainant, he gave blank
signed cheques as security and that the complainant misused one such
cheque and filed the above complaint. The counter foil of the cheque
book maintained by the accused is marked as Ext.D4. Ext.P1 cheque
is also seen issued from the above counter foil book. It was submitted
by the learned counsel for the accused that the last cheque leaf bearing
No.745240 in Ext.D4 counter foil came up for collection before Ext.P1
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cheque bearing No.755230. The Manager of the Bank was examined
as DW2. From his evidence it is clear that the cheque usually does
not come for collection in the chronological order or as per serial
number. The certified copy of the savings bank account ledger of the
accused was marked as Ext.D5. DW2 deposed that two cheque leaves
came up for collection. Hence the fact that Ext.P1 cheque came up
for collection subsequently is not of much significance.
11. It has come out in evidence that the complainant is
conducting chitty business and also engaged in lending money and the
accused and his family borrowed amounts from him. The mere fact
that a huge amount was due from the accused by way of chitty
transaction and a civil suit was pending against the accused for
recovery of the amount are not sufficient to doubt the case of the
complainant that he lent Rs. 5 lakhs to the accused and when he
demanded back that amount the accused issued Ext.P1 cheque as in
those transactions the complainant obtained sufficient security for
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realisation of those amounts and that the accused was paying the
amounts due in the chitty transaction promptly. If Ext.P1 cheque was
given by the accused as security for the chitty transaction, the accused
ought to have taken steps to get back that cheque after closing the
chitty transaction. But the accused has not taken any steps for getting
back the cheque. On considering all these aspects, I am of the view
that the case of the complainant that Ext.P1 cheque was issued by the
accused is believable. Since execution of Ext.P1 cheque is proved,
the presumption under Sections 118 and 139 of the Act would apply
and it is for the accused to rebut that presumption. But the evidence
adduced from the side of the accused is not sufficient to rebut that
presumption.
12. Since the complainant has proved all the essential elements
of the offence under Section 138 of the N.I. Act, the learned
Magistrate is not justified in acquitting the accused. As the accused
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committed the offence under Section 138 of the Act he is convicted
for that offence.
13. In the decision reported in Damodar S. Prabhu v.
Sayed Babalal H (2010(2) KHC 428 (SC)), it was held that in a
case of dishonour of cheques, compensatory aspect of the remedy
should be given priority over the punitive aspect. Considering the
facts and circumstances of the case, I am of the view that
sentencing the accused to pay a fine of Rs.5,00,000/- would meet
the ends of justice.
14. Accordingly this appeal is allowed. The judgment of
acquittal in C.C.No. 1593 of 1998 on the file of the Addl.
Magistrate of Ist Class – No.II, Mobile Court, Kottayam (Camp
sitting Changanacherry) is set aside and the accused is found
guilty and convicted under Section 138 of the N.I. Act and he is
sentenced to pay a fine of Rs.5,00,000/- The said fine shall be
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paid to the appellant as compensation under Section 357(1) of
Cr.P.C. The accused is permitted either to deposit the fine amount
before the court below or directly pay the compensation to the
appellant within three months from today and produce a memo to
that effect before the court below in case of direct payment. If the
accused fails to deposit or pay the said amount within the aforesaid
period, he shall suffer S.I. for a period of three months by way of
default sentence.
(M.L. JOSEPH FRANCIS)
Judge
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