IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN MONDAY, THE 13TH JULY 2009 / 22ND ASHADHA 1931 CRL.A.No. 1006 of 2002() ------------------------ ST.3659/1999 of JUDL. MAGISTRATE OF FIRST CLASS COURT-II, THRISSUR .................... APPELLANT(S): -------------- K.R. RAMAKRISHNAN, KANNARA HOUSE, P.O. PERINGOTTUKARA, THRISSUR DISTRICT. BY ADV. SRI.N.K.UNNIKRISHNAN SRI.S.RAJEEV RESPONDENT(S): --------------- 1. VELAYUDHAN, S/O. CHEMMATTIL RAMAN, KUTHIRATHADAM, VELLANKALLOOR P.O., THRISSUR DISTRICT. 2. STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. ADV. SRI.M.R.VENUGOPAL FOR R1 SMT.DHANYA P.ASHOKAN FOR R1 PUBLIC PROSECUTOR M.K.PUSHPALATHA THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 31/03/2009, THE COURT ON 13/07/2009 DELIVERED THE FOLLOWING: S.S.SATHEESACHANDRAN, J. ------------------------------- CRL.A.NO.1006 OF 2002 () ----------------------------------- Dated this the 13th day of July, 2009 J U D G M E N T Complainant is the appellant. His complaint filed against the 1st respondent, hereinafter referred to as 'the accused', for the offence punishable under Section 138 of the Negotiable Instruments Act, for short 'the N.I.Act', after trial, was dismissed by the Judicial First Class Magistrate Court, Thrissur. Accused was absolved of the charge and acquitted of the offence. Impeaching the correctness and legality of the order rendered in favour of the accused, the complainant has preferred this appeal. 2. Short facts giving rise to the appeal are thus: Towards the discharge of a liability under a loan availed, the accused issued Ext.P1 cheque for a sum of Rs.3,50,000/- promising its encashment on presentation in due course, was the case of the complainant. The cheque presented was, CRA.1006/02 2 however, dishonoured due to insufficiency of funds in the account maintained by the accused. Statutory notice intimating the dishonour and demanding the sum covered by the cheque was responded with a reply notice raising untenable contentions. Complainant thereupon launched the prosecution of the accused for the offence under Section 138 of the N.I.Act by filing the complaint. 3. The accused on appearance, pleaded not guilty when the particulars of the offence were made known. Complainant examined himself as PW1 and got marked Exts.P1 to P6 to prove his case. The accused, questioned under Section 313 of Cr.P.C. reiterating his plea of innocence set up a defence, which was already canvassed in his reply notice as well, that he had a loan transaction with the complainant for a lesser amount and that was settled after a mediation by DW2, a relative of both of them. The liability towards the complainant was discharged by funds collected from sale of his property. After mediation through DW2, a sum of Rs.1 lakh was handed over to DW2, and his wife DW3 paid the amount and collected a document from the accused evidencing the discharge of his CRA.1006/02 3 liability under the transaction, was the version of the accused. The learned Magistrate, after appreciating the materials tendered with reference to the facts and circumstances presented and also hearing the counsel on both sides, found the version of the complainant unworthy of acceptance. The defence canvassed by the accused was found probable in the proved facts established by the materials tendered in the case. The complaint was also found not entertainable, according to the Magistrate, as there was delay in sending the statutory notice after dishonour of the cheque, which amounted to non compliance of the period fixed under Section 138 (b) of the N.I.Act. In forming such conclusion, the learned Magistrate rendered an order of acquittal in favour of the accused. 4. I heard the learned counsel on both sides. The order of acquittal passed in favour of the accused is assailed by the learned counsel for the complainant contending that the court below went wrong in appreciating the facts involved and also the materials tendered in the case and it has resulted in miscarriage of justice. Reliance placed by the learned CRA.1006/02 4 Magistrate in Ishar Alloy Steels Ltd. v. Jayaswants Neco Ltd. (2001 (2) KLT 148 (SC)) to hold the issue of statutory notice of Ext.P1 notice was not in compliance of the mandate under Section 138 (b) of the N.I.Act is impeached by the counsel contending that decision was not applicable to the facts of the case and, further, the materials tendered by the complainant demonstrated beyond doubt that the notice was issued within 15 days from the date of intimation of dishonour from his bank. The learned counsel also urged that in the nature of the defence canvassed by the accused admitting the loan transaction, but, for a lesser amount and setting up a plea of discharge, the entire burden was on the accused to prove the discharge and that having been not established, the complainant can bank upon the presumption under Section 139 of the N.I.Act that the cheque had been handed over towards discharge of a debt or liability by the accused. The accused in such circumstances cannot escape from conviction for the offence under Section 138 of the N.I.Act. On a misreading of the evidence, the court below has acquitted him, which is liable to be reversed by allowing his appeal, is the submission of the counsel. On the other hand, the learned CRA.1006/02 5 counsel for the accused contended that there is no merit in the appeal and the acquittal of the accused does not warrant any interference in the proved facts and circumstances of the case. The cheque was issued in blank form with signature alone as security for the loan transaction, was the case of the accused who contended that the amount borrowed from the complainant was much less than alleged and it was discharged by repayment. The evidence of the accused examined as DW1 and his witnesses, DWs.2 and 3, it is submitted by the counsel, clearly establish that whatever amount covered by the transaction between the complainant and the accused was discharged, but, retaining the cheque on false representations, after settlement of the transaction, the complainant had foisted the false case on the accused. Inviting my attention to the evidence of the complainant examined as PW1 that the loan transaction was in 15.12.1996 but the cheque was dated 6.11.1998, it is submitted, the cheque obtained in blank form with signature was later filled up and presented by the complainant. The accused need only show that his version is probable and when materials are placed before the court, in the absence of legal evidence CRA.1006/02 6 proving his guilt, he is entitled to an acquittal, submits the counsel. Reliance is placed by the counsel on Narayana Menon v. State of Kerala (2006 (3) KLT 404 (SC)) and Krishna Janardhan Bhat v. Dattatraya Hegde (2008 (1) KLT 425 (SC)) to contend that the defence version has to be tested by preponderance of probabilities and to prove his case the accused can rely not only on the materials on record but also the circumstances established in the case. When the initial burden is discharged by the accused showing that his version is probable the presumption under Section 139 of the N.I.Act, it is submitted, pales into insignificance. The acquittal of the accused passed by the learned Magistrate, it is submitted, deserves only to be upheld. 5. The learned Magistrate was not correct in holding that the notice issued on dishonour of the cheque was beyond the period of 15 days and there was non compliance of the mandatory provisions under the proviso to Section 138 (b) of the N.I.Act in issuing such notice. The above conclusion was reached by the trial Magistrate relying on Ishar Alloy Steels Ltd. v. Jayaswants Neco Ltd. (2001 (2) KLT 148 (SC)). CRA.1006/02 7 That was a case which related to the presentation of the cheque in the bank beyond the stipulated time of six months from the date of drawing of the instrument and that decision does not deal with the issue of notice of dishonour of the cheque as covered by proviso to Section 138 (b) of the N.I.Act. In Munoth Investments Ltd. v. Puttukola Properties Ltd. And another ((2001) 6 SCC 582), it has been held that 15 days, the period fixed for issuing of the notice on dishonour of the instrument, are to be reckoned the receipt of information regarding the return of the cheque as unpaid and not on the date when the instrument presented was dishonoured. The complainant, who presented the cheque through his bank after its return as unpaid on dishonour of the cheque from the drawers bank will get information of such dishonour only when an intimation of such dishonour is given by his bank and not on the date when the instrument was dishonoured at the drawer's bank. So much so, the finding of the learned Magistrate that the notice of dishonour was issued beyond time after the expiry of 15 days from the date of dishonour of the cheque is patently erroneous. Notice issued by the complainant in the present case is found to be within CRA.1006/02 8 time satisfying the mandate under the proviso to Section 138 (b) of the N.I.Act. 6. The version of the complainant is that the loan of Rs.3,50,000/- was advanced by the accused on 15.12.1996 and when he demanded the money on 5.11.1998, the accused issued Ext.P1 cheque dated 6.11.1998. The amount was advanced without taking any security and he waited for nearly two years before demanding the sum from the accused if the version of complainant on the transaction is to be believed. Despite denial of the transaction alleged over the issue of Ext.P1 cheque by the accused, no evidence on the transaction other than the evidence of the complainant as PW1 was tendered in the case. The amount of Rs.3,50,000/- advanced as loan was taken from his business and that could be verified with his account was his version before the court. When challenged, he undertook to produce the account and also his income tax returns in which also he claimed that the loan transaction with the accused was reflected. But none of these documents were produced before the court. When complainant was questioned whether there was a mediation CRA.1006/02 9 for settlement of the transaction with the accused through DW2 it was categorically denied. He would further state that he has no enmity towards DW2 and his wife DW3. It has come out from the evidence of DW3, the wife of DW2 that on the instructions given by her husband, she handed over Rs. 1 lakh to the complainant towards settling of the transaction with the accused. When she demanded the cheque, which had been collected by him from the accused, it was represented as having been lost, and on her compulsion, the complainant gave Ext.D3 that the transaction had been settled subscribing his signature. She again persisted for recording that the entire liabilities were over, and, then, it was so subscribed in Ext.D3 by the son of the complainant, who was also present with him, was her version. The complainant and his son came to her house, collected the sum of Rs.1 lakh and gave Ext.D3 on her demand when he failed to return the cheque, was her version. The cross examination of that witnesses by the complainant would show that, later, she had filed a complaint before the police. It has also come out from her evidence that her complaint before the police station could not be proceeded with as the complainant had taken anticipatory bail from the CRA.1006/02 10 court. 7. The evidence of DW3 has a ring of truth. Her version that the complainant had taken anticipatory bail pursuant to her complaint before the police long after the settlement of the transaction at her house by handing over Rs.1 lakh to the accused and his execution of Ext.D3 in the presence of his son, has to be appreciated in the backdrop that the accused, complainant and also Dws.2 and 3 are relatives. Even the complainant would state that he has no enmity towards DW3 and her husband. He had taken anticipatory bail when she filed a complaint, which is her version, remain unchallenged is a material circumstance probabilising the truthfulness of the version presented by that witness. Her version is corroborated in material particulars by her husband DW2. He would assert that he intervened when demand was made by the complainant for excessive interest from the accused, and finally by his mediation, it was agreed to settle the transaction for Rs.1 lakh. The accused has also mounted the box to swear in support of his defence version. The learned Magistrate, who had the opportunity to watch the demeanour CRA.1006/02 11 and deportment of the witnesses found the testimony of the accused examined as DW1 and also of his witnesses Dws.2 and 3 reliable, trustworthy and convincing. True, there are some discrepancies in the evidence of Dws.2 and 3, but that has to be viewed as innocuous circumstances not affecting the merit of the version presented by them that in fact, there was a settlement of the entire transaction and the complainant had collected Rs.1 lakh, but not returned the cheque representing that it had been lost. The evidence let in by the accused and the circumstances presented in the case when tested in the backdrop of preponderance of probabilities show that his version is probable. When the initial burden has been discharged by the accused, it was incumbent on the complainant to prove the transaction as alleged. 8. The version of the complainant as PW1 that two years later, after availing the loan, that too for a sum of Rs.3,50,000/-, on his demand for return of the money Ext.P1 cheque dated the next day was handed over by the accused can be taken only with a pinch of salt. Nonproduction of the account books and income tax returns, which according to the CRA.1006/02 12 complainant reflected the loan transaction with the accused, is another material circumstance discrediting his case. Even the complainant has no case that Dws.2 and 3, who are admittedly related to him and also to the accused, had any axe to grind against him. In fact, the complainant would state when examined as PW1, he has no enmity towards them. Why should Dws.2 and 3, the former a Police constable and the latter his wife, perjure against the accused and that too before a court of law that the former acted as a mediator to settle the transaction between the complainant and the accused, and the latter asserting before the court that she handed over Rs.1 lakh towards settlement of the transaction to the complainant who arrived in the company of his son, at her house. The fact that she filed a complaint before the police months later when the complainant proceeded against the accused on the basis of Ext.P1 cheque, after getting it dishonoured, and the complainant securing an anticipatory bail from the court to escape from arrest is a telltale circumstance, in the given facts of the case, adding credence to the version presented by the accused and his witnesses, Dws.2 and 3. In appreciating the evidence regard must be CRA.1006/02 13 had to the normal human course of conduct, and when the evidence of Dws.2 and 3 is analysed in that backdrop, needless to point out, that DW3, a lady would not have come to the court to give evidence in support of the accused unless she was directly involved in the settlement of the transaction as narrated in her evidence. 9. On a scrutiny of the materials produced in the case and the proved facts and circumstances established thereunder, I find the order of acquittal rendered in favour of the accused by the learned Magistrate is unimpeachable. The appeal is devoid of any merit, and, accordingly, it is dismissed. S.S.SATHEESACHANDRAN JUDGE prp S.S.SATHEESACHANDRAN, J. -------------------------------------------------------- CRL.A.NO.1006 OF 2002 () --------------------------------------------------------- J U D G M E N T --------------------------------------------------------- 13th July, 2009