IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN TUESDAY, THE 11TH MARCH 2008 / 21ST PHALGUNA 1929 CRL.A.No.1582 of 2003 (C) -------------------------------- AGAINST THE ORDER IN CRL.L.P.297/2003 Dated 20/08/2003 CC.70/1999 of JUDL. MAGISTRATE OF FIRST CLASS-IV (MOBILE), TRIVANDRUM. .................... APPELLANT: COMPLAINANT -------------------------------- DR. JACOB GEORGE, T.C.24/98, PANAVILA JUNCTION, MAIN ROAD, THIRUVANANTHAPURAM. BY ADV. SRI.P.SANTHALINGAM SRI.A.D.SHAJAN RESPONDENTS: ACCUSED ------------------------------ 1. RIAS USMAN S/O. T.T.P.USMAN, RIYAD HOUSE, M.R.A.A-70, KANJIRAMPARA P.O., THIRUVANANTHAPURAM. 2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM BY ADV. SRI.V.AJAKUMAR SRI.T.M.CHANDRAN PUBLIC PROSECUTOR SRI.T.J.AMBOOKAN THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 11/03/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.P.BALACHANDRAN, J. ------------------------------------------------ Crl. Appeal No.1582 of 2003 ------------------------------------------------ Dated this the 11th day of March, 2008 JUDGMENT This is appeal filed with leave by the complainant in C.C.70/99 on the file of the Judicial First Class Magistrate's Court-IV (Mobile), Thiruvananthapuram assailing the acquittal of the first respondent of offence punishable under Section 138 of the N.I. Act under Section 255(1) Cr.P.C. 2. The appellant filed complaint in the court below alleging that the first respondent borrowed from him an amount of Rs.5 lakhs and in discharge of the said liability, the first respondent issued two cheques - one bearing No.000360 for Rs.2,50,000/- dt.30/04/99 and another cheque bearing No.000361 for Rs.2,50,000/- dt.03/05/99 - both drawn on an account maintained by the first respondent at the Thiruvananthapuram bakery junction branch of Crl. Appeal No.1582 of 2003 -2- the State Bank of Travancore; that the cheques were signed by the first respondent as proprietor of Universal Travel Enterprises; that the appellant presented the cheques for encashment through his bankers namely the South Indian Bank, Thiruvananthapuram main branch and Syndicate Bank, Palayam branch, Thiruvananthapuram, but those cheques were informed to have been bounced for reason of “insufficiency of funds” in the account of the first respondent respectively on 10/05/99 and 11/05/99; that on 19/05/99 appellant caused notice being issued to the first respondent informing him of the dishonour of the cheques and demanding payment of the amounts covered by the cheques; that the first respondent who accepted the notice on 20/05/99 has sent a reply raising baseless contentions and has not paid up the amounts covered by the cheques either within the statutory period or ever Crl. Appeal No.1582 of 2003 -3- thereafter and he has thereby committed an offence punishable under Section 138 of the N.I. Act. 3. The complaint was taken cognizance of under Section 138 of the N.I. Act by the Chief Judicial Magistrate Court, Thiruvananthapuram recording the sworn statement of the appellant/complainant and was registered as C.C.1076/99 on the file of his court. Thereafter, the case was transferred to the court of the Judicial First Class Magistrate- IV (Mobile), Thiruvananthapuram for trial and disposal. 4. On appearance of the first respondent before the learned Magistrate, he was served with copies of all relevant records in the case and was questioned by the Magistrate reading over the particulars of the offence and explaining it to him. Thereupon, he pleaded not guilty and consequently, a trial Crl. Appeal No.1582 of 2003 -4- of the case was conducted by the Magistrate. 5. On the side of the complainant, he got himself examined as PW1 and got marked on his side Exts.P1 to P10. On the appellant/ complainant closing his evidence, the first respondent was questioned under Section 313 Cr.P.C. Thereupon, he admitted that he is proprietor of Universal Travel Enterprises and that Exts.P1 and P2 cheques are issued by him but according to him, in relation to dishonour of Exts.P1 and P2 cheques no notice intimating dishonour and demanding payment of the amounts covered by the cheques was received by him and however, that no amount is due from him to the appellant. According to him, he borrowed an amount of Rs.2 lakhs from the appellant in January, 1999; and that was repaid by daily payments at the rate of Rs.2,000/- for 110 days; that the loan was so availed at an interest of 36% but after availing of the loan Crl. Appeal No.1582 of 2003 -5- the appellant demanded interest at a still higher rate and he was not prepared to pay interest at that rate; that at the time of borrowing of Rs.2 lakhs, a total of eight cheques filling up amounts alone therein totaling to Rs.20 lakhs had been delivered over to the appellant by way of security and that Exts.P1 and P2 are two cheques out of the eight cheques so delivered over to the appellant. 6. On the defence side DW1 is examined and Exts.D1 to D6 were got marked. The learned Magistrate considered the case in the light of the evidence adduced as aforesaid; found that Exts.P1 and P2 cheques are cheques drawn on an account maintained by the first respondent but that those cheques are not shown to have been issued in discharge of any debt as alleged; that Exts.P1 and P2 were however dishonoured for want of sufficient funds in the account of Crl. Appeal No.1582 of 2003 -6- the first respondent to honour those cheques; that however, all statutory procedural formalities which are pre-requisite for the maintainability of a complaint are not shown to have been fulfilled; and that therefore, no cause of action has arisen and that the appellant has failed to bring home the guilt in the first respondent and consequently, therefore, that the appellant is liable to be acquitted of the offence under Section 138 of the N.I. Act. Accordingly, the first respondent was acquitted of the said offence. Hence, this appeal by the aggrieved appellant/ complainant. 7. It is contended before me by the learned counsel for the appellant that Exts.P1 and P2 cheques are established on evidence as being cheques drawn on an account maintained by the first respondent with the drawee bank; that the signature and the writing of the Crl. Appeal No.1582 of 2003 -7- amount both in Exts.P1 and P2 cheques are also admitted by the first respondent that the reason for dishonour is evidenced to have been insufficiency of funds in the account of the first respondent to honour those cheques; that all statutory formalities required to be complied with for the maintainability of a complaint under Section 138 of the N.I. Act stood satisfied in the instant case; that however, there is presumption also under Section 139 of the N.I. Act in favour of the holder of the cheque when formal proof of issuance of cheque is given; that there is no proof of discharge of liability under those two cheques and the first respondent has no case that the amount due under the cheques are paid up and that therefore, the first respondent should have been found guilty of an offence punishable under Section 138 of the N.I. Act and should have been convicted and Crl. Appeal No.1582 of 2003 -8- sentenced by the court below for offence under Section 138 of the N.I. Act. 8. It is contended on the other hand by the counsel for the first respondent that Ext.P5 notice is not in relation to Exts.P1 and P2 cheques dishonoured respectively under Exts.P3 and P4 memorandums; that the appellant has inconsistent version as to the writing and delivery of Exts.P1 and P2; and that at one portion of the evidence he has stated that the cheques were written and signed in his presence whereas at another portion of the evidence, he has deposed that the cheques were written up and being brought and therefore, he has no knowledge as to who has written those cheques. 9. It is further contended by him that there is no legally enforcible debt which is shown to have been in existence so as to be discharged by issuance of Exts.P1 and P2 Crl. Appeal No.1582 of 2003 -9- cheques; that the Apex Court has held that there is no presumption regarding existence of debt or existence of a legally recoverable debt under Section 139 of the N.I. Act except that a cheque as envisaged under Section 138 of the N.I. Act is issued in favour of the payee for discharge of any debt or other liability; that the first respondent had borrowed only an amount of Rs.2 lakhs and that had been discharged in the manner stated by him by payment in daily instalments; that there is no proof of issuance of Ext.P10 notice and therefore, the appellant has miserably failed to show that any cause of action has arisen for a complaint under Section 138 of the N.I. Act; that the accused in a complaint under Section 138 of the N.I. Act is not obliged to go to the witness box and swear to his contentions and withstand cross examination as it is enough that his Crl. Appeal No.1582 of 2003 -10- contentions are either probabilised or the truth of the allegations in the complaint is improbabilised; that the appellant never disclosed the real transaction before court and only when he is cross examined that a case of advancing of loan of Rs.10 lakhs under four cheques comes to light though according to the first respondent, a total of eight cheques of value of Rs.20 lakhs had been handed over to the appellant while availing of Rs.2 lakhs by way of loan; that there is no proof of source for the appellant to advance either Rs.10 lakhs which he claims to have advanced under four cheques to the first respondent; and that in the circumstances of the case, the presumption under Section 139 of the N.I. Act stands rebutted by preponderance of probabilities and that therefore, the acquittal of the first respondent by the court below has only to be upheld though the court below had not accepted Crl. Appeal No.1582 of 2003 -11- all the contentions that were advanced on behalf of the first respondent. 10. I have carefully considered the contentions advanced by the counsel on both sides. It is the definite case of the appellant that the first respondent borrowed from him an amount of Rs.5 lakhs and to discharge the liability he issued two cheques which are Exts.P1 and P2 and those are for Rs.2,50,000/- each. Both those cheques are drawn at the Bakery junction branch of the State Bank of Travancore at Thiruvananthapuram. Those are dated respectively 30/04/99 and 03/05/99. Those cheques were being dishonoured respectively under Exts.P3 and P4 memorandums by the drawee bank and are dated respectively 04/05/99 and 07/05/99. Ext.P5 is true copy of lawyer notice issued by Advocate G. Manmadhan Nair to the first respondent on 18/05/99; and that is let in evidence in the course of Crl. Appeal No.1582 of 2003 -12- examination of the appellant as PW1 stating that it is notice issued consequent on dishonour of Exts.P1 and P2 cheques; and Ext.P6 is produced as being postal registration receipt for issuance of Ext.P5 notice and Ext.P7 as being postal acknowledgment card evidencing receipt by the first respondent of Ext.P5 notice issued under Ext.P6 postal registration receipt. Ext.P5 is dated 18/05/99. Ext.P6 postal registration receipt is dated 19/05/99 and Ext.P7 postal acknowledgment card is signed with dt.20/05/99. There is absolutely no room to think that Ext.P6 postal registration receipt and Ext.P7 postal acknowledgment card do not relate to the original of Ext.P5 notice issued to the first respondent on 18/05/99. But strangely enough it is seen that the cheque numbers mentioned therein are in relation to two other cheques one for Rs.3 lakhs and the other for Rs.2 Crl. Appeal No.1582 of 2003 -13- lakhs and those are cheques drawn at the Kovalam branch of Canara Bank. Thus, when the fact of two other cheques of Rs.3 lakhs and Rs.2 lakhs respectively came to light, an attempt was made by the appellant to show that Ext.P10 is the notice issued under Ext.P6 postal registration receipt and Ext.P7 is the postal acknowledgment card whereunder it was received by the first respondent. Both Exts.P5 and P10 are notices issued by Advocate G. Manmadhan Nair. The said advocate is the best person to speak as to whether the postal registration receipt and the acknowledgment are in relation to Ext.P5 or in relation to Ext.P10. The said lawyer is not examined. Ext.P10 does not bear the signature of Advocate Manmadhan Nair. However, Ext.P10 also is dt.18/05/99 and it is only when the fact of two other cheques also having been dishonoured and action having been initiated on the basis Crl. Appeal No.1582 of 2003 -14- thereof was brought to light that the appellant takes the stand that actually it was Rs.10 lakhs that was advanced to the first respondent under four cheques and not that there was advancing of only Rs.5 lakhs as alleged in the complaint. It is difficult to accept Ext.P10 as the notice issued under Ext.P6 postal registration receipt and accepted by the first respondent under Ext.P7 postal acknowledgment card in the absence of any convincing evidence in the matter and the appellant who has tendered evidence as PW1 is not a competent witness to swear to the notice issued by Advocate Manmadhan Nair. Exts.D5 and D6 are notices issued by DW1 on instructions from the appellant and he has proved those notices as having been issued by him on 22/06/99. Ext.D5 is in relation to Ext.P2 cheque and Ext.D6 is in relation to a cheque which is not subject matter in the complaint Crl. Appeal No.1582 of 2003 -15- filed by the appellant. Ext.D2 is produced to show that it is reply to Exts.D5 and D6 notices issued by DW1 wherein the details of all the eight cheques entrusted with the appellant at the time of availing of loan of Rs.2 lakhs is disclosed and the contentions now raised by the first respondent as regards the transaction is made mention of in Ext.D2 as well. The transaction as contended in Ext.D2 is also seen made mention of in Ext.D3 reply issued to Advocate Manmadhan Nair. Exts.D1 and D4 are stated to be acknowledgment cards signed by the appellant for having received copies of Exts.D2 and D3 notices issued to him direct. 11. There is no dispute however, that Exts.P1 and P2 cheques are drawn on an account maintained by the first respondent though according to him, the dating and the writing of the payees name therein are not done by Crl. Appeal No.1582 of 2003 -16- him. However, the signature therein is admitted. There is no dispute that he himself wrote the amount also in Exts.P1 and P2. There is also no dispute in that funds were insufficient to honour both the cheques or either Ext.P1 or Ext.P2 cheques. The contentions of the learned counsel for the appellant that there is no proof of discharge is not having any bearing at all in the circumstances of this case. The contention is not one of discharge of amounts alleged to be due under Exts.P1 and P2 and the first respondent has no case that he has made payment of amounts covered by Exts.P1 and P2. It is only when the appellant is cross examined that he discloses for the first time that there are two other cheques as well for a total amount of Rs.5 lakhs other than Exts.P1 and P2 cheques for Rs.5 lakhs. Though according to PW1, Exts.P1 and P2 cheques were being given on 26/09/98 he has admitted in Crl. Appeal No.1582 of 2003 -17- cross examination that he had not instructed the first respondent to bring cheques on 26/09/98. All the same, he admits that both in Exts.P1 and P2 the writings had been made even while it was brought over to his house and therefore, he is not aware as to who wrote those cheques. Appellant is not aware as to whether the cheques which are not subject matter in this complaint was also bearing the same date. Though the appellant states that he was having sufficient funds to make advance of Rs.10 lakhs to the first respondent under four cheques as alleged by him, when asked about the source of the amounts as to whether the entire Rs.10 lakhs was being withdrawn from the same bank, the appellant has stated that he does not remember. It is too much to believe that a person who shells out by way of loan an amount of Rs.10 lakhs to another is unable to remember as to from where did he raise so much funds to be advanced by way of Crl. Appeal No.1582 of 2003 -18- loan. He has adduced absolutely no evidence to show that he is a man of means so as to be affluent enough to advance Rs.10 lakhs under the four cheques or to advance Rs.5 lakhs under Exts.P1 and P2 as alleged by him. It is in this context that the probabilities of the defence contentions has to be considered. 12. According to the first respondent, eight cheques were received by the appellant from him by way of security when he availed of a loan of Rs.2 lakhs from the appellant. As rightly contended by the counsel for the first respondent, the Apex Court has held that presumption available under Section 139 of the N.I. Act is not regarding existence of debt or of existence of a legally recoverable debt but only a presumption in favour of the holder of the cheque that the same has been issued for discharge of any debt or other liability. Hence, the presumption is only that the first respondent was indebted to the appellant which Crl. Appeal No.1582 of 2003 -19- the first respondent himself admits. No further benefit by way of presumption is available to the appellant to establish his allegations in the complaint. Further, the appellant has also miserably failed to establish that Ext.P5 notice was not the notice despatched under Ext.P6 and delivered to the first respondent under Ext.P7 but was Ext.P10 notice. If at all it was Ext.P10 notice that was despatched under Ext.P6 postal registration receipt and delivered to the first respondent under Ext.P7 postal acknowledgment card there must certainly be another postal registration receipt and another postal acknowledgment card as well, as Ext.P5 is there which is dt.18/05/99 which in the normal course can be taken as notice despatched on 19/05/99 under Ext.P6 and received by the first respondent under Ext.P7 postal acknowledgment card. It is too much to accept the case of the appellant that Exts.P6 Crl. Appeal No.1582 of 2003 -20- and P7 are in relation to Ext.P10 notice when the counsel who issued the said notice is not cited and examined as a witness as he is the best person and the material witness to establish that aspect. There is no reason to disbelieve the evidence of DW1 as well, as the appellant has admitted in cross examination that DW1 who issued Exts.D5 and D6 notices was his legal advisor at one point of time. As rightly contended by the counsel for the first respondent, it was not incumbent upon the first respondent/accused to enter into the witness box to swear to his contentions. It is enough that by preponderance of probabilities the defence contention is probablised. Thus, I have no hesitation to hold that the appellant has miserably failed to establish that the first respondent owed an amount of Rs.5 lakhs to him to be discharged under Exts.P1 and P2 cheques; that the presumption under Section 139 of the N.I. Act in the circumstances is Crl. Appeal No.1582 of 2003 -21- not to come to the rescue of the appellant and that there is no proof of Ext.P10 notice having been issued by the appellant to the first respondent so as to comply with statutory requirements under proviso (b) to Section 138 of the N.I. Act and that therefore, the acquittal of the first respondent of offence under Section 138 of the N.I. Act has only to be confirmed and this appeal dismissed. 13. In the result, confirming the correctness of the acquittal of the first respondent vide judgment impugned, I dismiss this Criminal Appeal. K.P.BALACHANDRAN, JUDGE kns/-