IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 16TH DECEMBER 2008 / 25TH AGRAHAYANA 1930 CRL.A.No. 492 of 2003() ----------------------- CC.334/2001 of JUDL.MAGISTRATE OF FIRST CLASS-I, KANJIRAPPALLY CRL.M.C.No.481 of 2003 .................... APPELLANT/COMPLAINANT: ------------------------------ P.P.PHILIP, AGED 57 YEARS, SON OF PHILIPOSE, PAIKLAYIL HOUSE, KANJIRAPPALLY BY ADV. SRI.H.B.SHENOY RESPONDENTS/ACCUSED AND STATE: ------------------------------------------- 1. JOSE, AGED 48 YEARS, PAINUMMOOTTIL, MANNARAKKAYAM, KANJIRAPPALLY. 2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM ADV. SRI.P.RAVINDRA BABU FOR R1 PUBLIC PROSECUTOR SMT.LAKSHMI RANI.K.L FOR R2 THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 16/12/2008,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V.K.MOHANAN, J - - - - - - - - - - - - - - - - - - - - - - - - Crl. Appeal No. 492 of 2003 - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 16th day of December, 2008. J U D G M E N T This appeal is at the instance of the complainant in a prosecution for the offence under Section 138 of the Negotiable Instruments Act, as he is aggrieved by the order of acquittal passed by the Court below under Section 255(1) of Code of Criminal Procedure. 2. The case of the complainant is that the accused had entered into an agreement with the complainant for the sale of 50 cents of land owned by the accused to the complainant for a sum of Rs.5,25,000/- and the complainant forced to file a civil suit for specific performance of the said agreement and obtained a decree. Thereafter the parties entered into a compromise on 25.7.2000 as per Ext.P3. As per the clause of the said agreement the accused had agreed and undertaken to pay a sum of Rs. 1 lakh to the complainant as compensation and on the very same day a post dated cheque dated 25.1.2001 of Rs. 1 lakh was executed and issued by the accused in favour of the complainant. The date, amount, cheque number etc. are specifically incorporated in Ext.P3. When the said cheque was presented for encashment the same was dishonoured as there was no sufficient fund to honour the cheque. Consequently, the complainant issued lawyer notice and though the accused received the same no Crl. Appeal No. 492 of 2003 -2- payment was made and hence the complainant approached the court below filing the complaint. When the particulars of allegations were read over and explained to the accused on his appearance, he denied the same which resulted in the further trial during which the complainant himself was examined as PW1 and Exts.P1 to P13 were marked from the side of the complainant. When the accused was examined under Section 313 of the Code of Criminal Procedure he denied the circumstances, which emerged during the prosecution evidence and when put to him. The further case of the accused is that the cheque in question was issued as a security as per the said agreement and the complainant did not act or kept his promise and therefore the accused was not legally liable to pay the amount and as there was no consideration. However, the court below as per the impugned judgment found that the cheque in question was given as additional security and the complainant could not prove that Ext.P4 cheque was issued towards the discharge of any debt or liability and accordingly held that no offence under Section 138 of the Negotiable Instruments Act is attracted. Finally found that the accused is not guilty under Section 138 of the Negotiable Instruments Act and accordingly he was acquitted. It is above finding and acquittal, challenged this appeal. 3. The learned counsel for the appellant submitted that the cheque in question is a post dated cheque issued towards the materialisation of the compromise and settlement arrived as per Ext.P3 agreement and therefore Crl. Appeal No. 492 of 2003 -3- the accused was liable to pay the amount agreed as per Ext.P3 agreement and the cheque in question was issued by him towards the discharge of the said liability. The learned counsel further submitted that in the light of the decisions of this court, even though the cheque was given as a security, the offence under Section 138 is attracted and therefore the finding arrived on by the court below is liable to be set aside. 4. Per contra the learned counsel for the respondent/accused submitted that the complainant gone back from the terms containing in Ext.P3 agreement and therefore there was no consideration and no liability can be fixed upon the accused because of there is no passing of consideration. The learned counsel invited my attention to 313 statement of the accused and also deposition of DW1. In the 313 statement, the stand taken by the accused is same as submitted by the learned counsel for the respondent. Thus the counsel for the respondent submitted that cheque in question was not actually issued to the complainant but to another person as part of the agreement. 5. I have carefully considered the contentions advanced by the learned counsels for both the appellant as well as the respondent. The learned counsel for the appellant took me through Ext.P3 agreement and submitted that in Ext.P3 agreement itself it is mentioned the cheque number and the date of the cheque etc. Towards the bottom of Ext.P3 the appellant/complainant has made an endorsement for the receipt of the Crl. Appeal No. 492 of 2003 -4- cheque mentioned thereon for an amount of Rs. 1 lakh. Ext.P3 was signed by both the complainant as well as the respondent/accused. From the 3rd clause of the agreement it is specific that the cheque in question was given in the date of the agreement itself. It is not mentioned therein that the same was entrusted with any other person. But to the contrary of the submission made by the learned counsel for the respondent, the receipt is to the effect that the cheque in question was received by the complainant. 6. A Division Bench of this court in the decision in Lillykutty v Lawrance [2003 (3) KLT 721] has held that mere fact that the payee's name and the amount shown in the cheque is not in the handwriting of the drawer of the cheque that by itself is not a ground to contend that they are not validly issued or the cheques were not executed at all. Though the above decision is not pertained to the offence under Section 138 of the Negotiable Instruments Act., there also, towards the discharge of the debt two post dated cheques were given by the defended. On the basis of which subsequently civil proceedings were initiated which finally culminated in the above decision. In the above decision, this court has held that under Section 118 of the Negotiable Instruments Act until the contrary is proved presumption can be made that Negotiable Instrument was made for consideration. When the drawer of the cheque did not find any infirmity in the cheque presented by the payee, presumption traced under Section 118 would apply unless the contrary is proved by the drawer of the cheque. Crl. Appeal No. 492 of 2003 -5- 7. This court in General Auto Sales v Vijayalakshmi [2005(1) KLT 478] as held that even if a blank cheque has been given towards liability or even as security, when liability is assessed and quantified, if cheque is filled up and presented to bank, person who had drawn the cheque cannot avoid criminal liability arising out of section 138 of Negotiable Instruments Act. It is also held in Moideen v Johny [2006(3) KLT SN 62 Case No. 85] that even if a blank cheque is issued as a security, the person in possession of the blank cheque can enter the amount of liability and present it to the bank. On examination of the facts and circumstances involved in the present case, in the light of the above decision, it can be seen that liability under Section 138 of the Negotiable Instruments Act is attracted against the respondent/accused. As evidenced by Ext.P3 agreement, incorporating the details of the cheque including the cheque number, date, name of the bank etc, the cheque in question was entrusted with the complainant and the complainant has made the endorsement regarding the receipt of such cheque. The second clause itself shows that towards the withdrawal of the case, Ninan Jose agreed to pay Rs.1 lakh within six months to the complainant/appellant. The date of the cheque mentioned in the third clause of Ext.P3 is dated 25.1.2001. If that be so, the cheque in question can be presented after six months from the date of the agreement. Thus it appears that Ext.P4 cheque was presented during the month of March 2001. It was dishonoured for want of sufficient funds. Crl. Appeal No. 492 of 2003 -6- When DW1 was examined he had deposed in terms of the Ext.P3 agreement etc. It is also stated by him that Ext.P3 was entrusted with him and on expiry of the term fixed as per Ext.P3 the same was given to the complainant. During the re-examination DW1 has categorically stated that the accused/respondent approached him demanding that the complainant may be requested not to present the cheque for encashment and such request was made on the expectation and anticipating money from America and amount can be settled thereafter. Thus going by the evidence and merits on record, it can be seen that the cheque in question was issued towards the discharge of the financial liability due to the complainant and the said cheque was dishonourned for want of sufficient fund. It is also discernible that the accused wanted to prolong the transaction of the cheque so as to make arrangement of money for the honour of the cheque. The grievance of the accused is that the complainant did not keep his words regarding the withdrawal of the case etc. are made as a result of an after thought. He could have stopped the payment by issuing stop memo against the cheque. But it is clear that he was under the impression that the cheque in question can be honoured if the same is presented as per his desire after having received money from America. In the light of the above factual position and in view of the position of the law settled through the above mentioned decision I am of the view that the finding arrived on by the court below is factually and Crl. Appeal No. 492 of 2003 -7- legally unsustainable and the same is liable to be set aside. 8. In the result the order of the acquittal passed by the court below and the impugned judgment is set aside. The accused is found guilty under Section 138 of the Negotiable Instruments Act. Consequently, the matter is sent back to the court below for imposing appropriate sentence after hearing the accused. The parties are directed to appear before the court below on 16.1.2009 on which day the court below is directed to take up the complaint on file and to award suitable sentence upon the accused after hearing him. The learned counsel for the respondent/accused submitted that the observation may be made to the effect that if the parties are ready to settle the matter they may be allowed to settle in the court below. Considering the above submission it is directed that when the court below awarding sentence against the accused, settlement if any, can also be taken into account Accordingly, the appeal is allowed and the case is remanded back for awarding sentence against the accused. V.K.MOHANAN, JUDGE rhs