IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR FRIDAY, THE 21ST NOVEMBER 2008 / 30TH KARTHIKA 1930 Crl.Rev.Pet.No. 1120 of 2007(D) ------------------------------- CRA.374/2005 of ADDL.SESSIONS COURT, PATHANAMTHITTA CC.222/2003 of CHIEF JUDICIAL MAGISTRATE COURT, PATHANAMTHITTA .................... REVISION PETITIONER(S): APPELLANTS/ACCUSED: ----------------------------------------------------------------------------- 1. P.D.RAJAPPAN PILLAI, S/O.MADHAVAN PILLAI, SREEVILASOM, S.R.A. 134, ELIPODU, VATTIYOORKAVU, THIRUVANANTHAPURAM. 2. K.R.VALSALADEVI PILLAI, W/O.RAJAPPAN PILLAI, SREEVILASOM, S.R.A. 134, ELIPODU, VATTIYOORKAVU, THIRUVANANTHAPURAM. BY ADV. SRI.P.VIJAYA BHANU SRI.P.M.RAFIQ RESPONDENT(S): RESPONDENTS:COMPLAINANT & STATE: ----------------------------------------------------------------------------------------- 1. M/S.SREENARAYANA TRADERS & FINANCIERS LTD., THAVALATHIL BUILDING, PATHANAMTHITTA IS REP. BY MANAGING DIRECTOR, M.K.DIVAKARAN,MINI SADANAM, KANNAMKARA, MANAGING DIRECTOR IS REPRESENTED BY HIS POWER OF ATTORNEY HOLDER M.K.VARADARAJAN, MANAPPALLIL, PRAMADOM, MALLASSERY (MANAGER SREENARAYANA TRADERS AND FINANCIERS LTD.) 2. STATE OF KERALA, REPRESENTED BY ITS PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY PUBLIC PROSECUTOR SRI. C.M.KAMAPPU - R2 ADV. SRI.C.S.MANILAL FOR R1 THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 21/11/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.SASIDHARAN NAMBIAR, J. ........................................... CRL.R.P.NO. 1120 OF 2007 ............................................ DATED THIS THE 21st DAY OF NOVEMBER, 2008 ORDER Revision petitioners are the accused and first respondent, the complainant in C.C.222 of 2003 on the file of Chief Judicial Magistrate, Pathanamthitta. First respondent lodged the complaint contending that first respondent is a private limited company engaged in money lending business and petitioners borrowed money and towards its repayment, issued a post dated cheque for Rs.2,25,000/- drawn in their account in Vattiyoorkavu Branch of State Bank of Travancore. Though the cheque was issued on 2.1.2003 and is dated 19.7.2003, when the cheque was presented for encashment, it was dishonoured for the reason that account was closed on 27.1.2003. In spite of notice demanding the amount covered by the dishonoured cheque, revision petitioners did not sent any reply or pay the amount and thereby committed the offence under Section 138 of N.I.Act. Petitioners pleaded not guilty. Their defence was that their Uncle, Ex-MLA Purushothaman Pillai had borrowed Rs. 3.5 lakhs from first respondent and for that transaction, first petitioner and his wife, second petitioner stood as surety and that amount CRRP 1120/2007 2 was borrowed on an interest @ 48% agreeing to pay monthly interest of Rs.14,000/- and till 22.6.2003, Rs.4,90,000/- was paid and as security, the title deed of the property of petitioners at Thiruvananthapuram apart from three blank cheques were entrusted along with signed stamp papers and after remitting Rs.4,90,000/-, when petitioners demanded back the title deed and the documents, they were told that it could be returned only on Ex-MLA Purushothaman Pillai repaying Rs.12,00,000/- due from him and the case is foisted misusing the signed blank cheque issued as security for the loan obtained by Purushothaman Pillai. Power of attorney holder of the Managing Director of first respondent company, under Ext.P1 power of attorney was examined as PW1. Exts.P1 to P8 series were also marked. First petitioner was examined as DW1. Exts.D1 to D5 were marked. 2. On the evidence, learned Magistrate found that Ext.P3 cheque was not issued as security and that too, for the loan obtained by Purushothaman Pillai, the uncle of petitioners and instead, was issued towards part payment of the amount due. It was also found that the cheque was dishonoured as the account was closed subsequent to the issuance of the cheque and in spite CRRP 1120/2007 3 of notice, petitioners did not pay. Learned Magistrate convicted and sentenced petitioners to simple imprisonment for three months and a compensation of Rs.10,15,000/-. Petitioners challenged the conviction before Sessions Court, Pathanamthitta in Crl.A.374 of 2005. Learned Sessions Judge, on reappreciation of evidence, confirmed the conviction and sentence and dismissed the appeal. It is challenged in this revision petition. 3. Learned counsel appearing for petitioners and first respondent were heard. The argument of the learned counsel appearing for petitioners is that courts below did not properly appreciate the evidence and in the light of the specific case of petitioners that they did not obtain any loan as alleged, and they were only sureties to the loan obtained by their Uncle, an Ex- MLA and even evidence of PW1 shows that the alleged amount borrowed was only Rs.13,00,000/- and Ext.P1 cheque is for Rs.20,25,000/-, which establishes that it is not a legally recoverable debt, but includes interest claimed in exorbitant rate and therefore conviction for the offence under Section 138 of N.I.Act is not sustainable. Learned counsel also argued that the evidence of DW1 should have been accepted and in any event, the account was closed before the date of Ext.P3 cheque and so CRRP 1120/2007 4 offence under Section 138 of N.I.Act is not attracted and to circumvent it, first respondent falsely claimed that cheque was issued in January 2003 and on the evidence, petitioners should have been acquitted. 4. Learned counsel appearing for the first respondent argued that the defence case was disproved by the documents produced by petitioners as well as other evidence on record and therefore the conviction is perfectly legal. 5. The first respondent complainant is a public limited company represented by its Managing Director. Complaint was filed through PW1, the power of attorney holder of the Managing Director. Evidence of PW1 establishes that he has personal knowledge on the transaction. Therefore evidence of PW1 is relevant and acceptable. 6. The case set up by the defence was one of the denial of any loan transaction between them and first respondent. What was contended by petitioners was that Ext.P3 cheque was issued as a blank cheque along with two other cheques as security for a loan obtained by their Uncle, an Ex-MLA. As against this case, petitioners themselves produced Ext.D1, a letter sent by first respondent and received by second petitioner. Ext.D1 CRRP 1120/2007 5 conclusively prove that second petitioner had borrowed money from first respondent company and notice was sent by first respondent to second petitioner for non payment of the amount due. Learned Magistrate and learned Sessions Judge appreciated the evidence in the proper perspective. Though as DW1, first petitioner deposed that cheques were handed over to first respondent as security for the loan obtained by Purushothaman Pillai, it was denied by PW1. There is no evidence in support of that case. If in fact, Ext.P3 was a blank cheque, when first petitioner handed it over and based on the cheque, a notice was received claiming more than Rs.20,00,000/-, any ordinary prudent man will definitely send a reply stating that the cheque was given as a blank cheque and that too as security and not for repayment of any amount due. The conspicuous absence of a reply by petitioners goes a long way to cast genuine doubt on the claim of petitioners. Though learned counsel vehemently argued that learned Sessions Judge should have allowed the application filed by petitioners to examine Purushothaman Pillai and an opportunity is to be granted to examine Purushothaman Pillai, on the facts and circumstances of the case, I do not find it necessary to grant an CRRP 1120/2007 6 opportunity as called for. Evidence of PW1 establish that Ext.P3 cheque was issued towards repayment of Rs.20,25,500/- due from petitioners to first respondent company. 7. Ext.D3 ledger extract establish payment of Rs.13,00,000/- in Loan No.29 of 2000. Ext.D4 establish that Rs.13,00,000/- was disbursed to the revision petitioners on 21.10.2000 out of which Rs.3,00,000/- was paid by first respondent to second petitioner by cheque and Rs.10,00,000/- to first revision petitioner. Ext.P1 cheque is for payment of that amount with interest till 19.7.2003. Though it was argued by learned counsel that the cheque was issued subsequent to the closing of the account and to circumvent the said fact, first respondent pleaded that the cheque was issued as a post dated cheque, prior to the date of closing of the account and an opportunity is to be granted to prove that the account was closed before issuance of the cheque, on the admitted and proved facts, I do not find any reason to grant opportunity as sought for. There is no case for petitioners that cheque was issued to first respondent subsequent to the date of closing of the account. Case is only that the cheque was issued as a blank cheque and as security and that too for the loan obtained by Purushothaman CRRP 1120/2007 7 Pillai. There was no case that the cheque was issued only subsequent to 27.1.2003, the date of closing of the account. Evidence establish that when Ext.P3 was issued as a post dated cheque, petitioners had a subsisting account. It was closed only ten days thereafter. Evidence also establish that first respondent has complied with all the statutory formalities provided under Section 138 and 142 of N.I.Act. Conviction of the petitioners for the offence under Section 138 of N.I.Act is perfectly legal. 8. Then the only question is regarding the sentence. Learned Magistrate sentenced petitioners to simple imprisonment for three months in addition to a compensation of Rs.10,15,000/- each. Learned Sessions Judge did not interfere with the sentence. Considering the nature of the case, interest of justice will be met if sentence is modified to imprisonment till rising of court in addition to fine with a direction to pay the compensation to first respondent when fine is realised. 9. Revision petition is partly allowed. Conviction of the petitioners for the offence under Section 138 of N.I.Act is confirmed. Sentence is modified. Petitiones are sentenced to imprisonment till rising of court and a fine of Rs.10,50,000/- each and in default, simple imprisonment for three months. On CRRP 1120/2007 8 realisation of fine, Rs.10,15,000/- each is to be paid to first respondent as compensation under Section 357(1) of Code of Criminal Procedure. Petitioners are granted four months time to pay the fine. M.SASIDHARAN NAMBIAR, JUDGE lgk/-