IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN THURSDAY, THE 21ST JULY 2011 / 30TH ASHADHA 1933 Crl.Rev.Pet.No. 1110 of 2010() ------------------------------ CRA.1008/2007 of ADDL.SESSIONS COURT-III, KOZHIKODE ST.4095/2007 of JUDICIAL FIRST CLASS MAGISTRATECOURT -II (MOBILE), KOZHIKODE .................... REVISION PETITIONER/APPELLANT/ACCUSED: ---------------------------------------------------------------------- K.ABDULLA, S/O.K.MAMMOLY MUSLIYAR, KANNANCHERY HOUSE, KODIYATHUR PO, MUKKAM. BY ADV. SMT.T.RESMI DAMODARAN RESPONDENT(S): RESPONDENTS/COMPLAINANT & STATE: ----------------------------------------------------------------------------------------- 1. SRI.GOKULAM CHIT AND FINANCE CO.PVT.LTD., GOKULAM TOWERS, NO.66 ARCOT ROAD, CHENNAI, REPRESENTED BY ITS LEGAL ASSISTANT.K.V.SAVITHA, W/O.K.V.THYAGARAJ, DIVISIONAL OFFICE, TECHNO TOP BUILDING, VAIKOM MUHAMMED BASHEER ROAD, KOZHIKODE. 2. STATE OF KERALA REPRESETNED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, KOCHI-31. R1 BY ADV. SMT.C.V.RAJALAKSHMI R2 BY PUBLIC PROSECUTOR SRI. SABU SREEDHARAN THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 21/07/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Kss S.S.SATHEESACHANDRAN, J -------------------------------------- Crl.R.P No.1110 OF 2010 -------------------------------- Dated this the 21st day of July 2011 ORDER The revision petitioner is the accused in S.T case No.4095/2007 on the file of the the Judicial First Class Magistrate (Mobile Court) II, Palakkad. He was prosecuted for the offence under Section 138 of the Negotiable Instruments Act (for short, NI Act) on a complaint filed by the 1st respondent, a financial concern operating chitty business. Negativing the plea of not guilty of the accused, the learned trial Magistrate convicted him for the offence and sentenced him to undergo simple imprisonment for a day and also to pay fine of Rs.18,000/- with default term of imprisonment for three months. Appeal preferred by the accused was turned down by the learned Sessions Judge, who confirmed the conviction and sentence without any modification. Feeling aggrieved, the accused has preferred this revision. 2. I heard the counsel on both sides. Knowing the limited scope of scrutiny over the finding of guilt, concurrently, entered by the two inferior courts, in exercise of revisional jurisdiction, the learned counsel for the accused confined the submissions on two challenges, to assail the conviction. The defence canvassed by the Crl.R.P No.1110 OF 2010 2 accused, that the cheque had been issued in blank form with his signature alone as a security for an entirely different loan transaction with the complainant, which to a great extent probabalised by the materials tendered on record, has not been correctly appreciated is the submission of the counsel. Similarly, the contention of the accused that the liability to be discharged was for a lesser amount than what was stated in the cheque, is proved in the case, but, it was not given consideration by both courts, according to the counsel. An officer of the complainant company, who was examined as DW2, has admitted in evidence that the liability on the chitty, in respect of which the cheque was alleged to have been issued, even in the year 2005, was around Rs.5,000/- only. Ext.D1 and Ext.D2 notices issued in relation to the liabilities arising under that chitty, the first one in the year 2003 and the second one in 2005, also would clearly spell out that at that point of time the liability was only for the amount shown under such notices. Explanation by the complainant through one of its officers, who was examined as PW1, that the notices covered only interest on the chitty amount, in the back drop the chitty transaction was closed as early in 2000, hardly meritted any consideration, is the submission of the counsel. However, both the courts below failed to examine Crl.R.P No.1110 OF 2010 3 the aforesaid circumstances brought out from the materials on record ignoring the fact that the defence of the accused need be shown to be probable satisfying the test of preponderance of probabilities alone, according to the counsel. The material discrepancy with respect to the sum claimed under the cheque in relation to the documentary materials produced, to sustain the complainant's case, was fatal to the case of the complainant, is the further submission of the counsel. The amount covered by the cheque towards the liability on the chitty amount, even on the admission of the complainant, was arrived calculating the principal amount with 24% interest per annum, is also highlighted by the counsel to contend that the prosecution under the cheque dishonoured, by way of complaint related to an unconscionable transaction. 3. Per contra, the learned counsel for the complainant contended that finding on fact entered by the inferior courts is not liable to be disturbed even if a different view is permissible so long as the view taken by the court could also be legitimately drawn on the materials on record. It is further submitted in a prosecution under Section 138 of the NI Act, on a dishonoured cheque, the scope of inquiry is much limited and proof of consideration and its Crl.R.P No.1110 OF 2010 4 adequacy is not a matter to be gone in deep, but only whether such instrument was issued in discharge of a debt or liability, to found a conviction against the accused. 4. I have given anxious consideration to the submissions made by the counsel on both sides with reference to the judgments rendered by the learned trial Magistrate and also the learned Sessions Judge. I do note that there is some force in the submissions made by the counsel for the accused even by taking note of the observations made in the judgments rendered by the inferior courts that the case of the complainant as to the actual amount covered by the cheque was accepted on the evidence of PW1, the witness examined on behalf of the complainant that the notices (Exts.D1 and D2) issued reflected the interest alone on the chitty liability. The transaction over the cheque on hand, related to chitty No.GIG-381/20, which was admittedly terminated in the year 2000. If that be so, without better material on record, on the mere statement of PW1, the court could not have concluded that the sum stated in Exts.D1 and D2 notices reflected interest alone on the then existing liability, when the notices exfacie showed the sum as the liability to be discharged. That circumstance, of course would not discredit and destroy the edifice of the case of the complainant Crl.R.P No.1110 OF 2010 5 that the cheque had been issued towards discharge of a debt or liability outstanding on a chitty transaction by the accused. Further, the plea canvassed by the accused that the cheque was issued as a security in blank form, which was sought to be projected by examining three witnesses including one of the officers of the complainant Company, was found by both the courts as not established on the materials on record. The finding so entered by the courts below, concurrently, after going through the judgment, I find, is not liable to be interfered with in exercise of revisional jurisdiction where it is not shown to be perverse. Then, the only question is the propriety and correctness of the conviction and sentence imposed against the accused. So far as the contentions raised, the accused has not tendered any material to show that a reply was sent to the statutory notice issued on dishonour of the cheque intimating such dishonour and demanding the sum covered under the Instrument. Even on the admission of the accused also some liability was outstanding on the chitty transaction with the complainant. Execution of the cheque and passing of consideration even if disputed by the accused, that alone need be proved by the complainant. On the materials placed, both the courts have accepted the case of the complainant that the cheque was duly Crl.R.P No.1110 OF 2010 6 executed and it was duly submitted for consideration also. Though the liability as regards the quantum, as the cheque was disputed by the accused and to some extent he has also succeeded in showing that the liability was for a lesser sum, that would not displace the value of presumptions available in favour of the complainant to sustain his case for prosecuting the accused on dishonour of the cheque. In that view of the matter, I find, the conviction imposed against the accused by the courts below for the offence under Section 138 of the NI Act does not warrant any interference. However, with respect to the sentence, when the facts presented on the case demonstrate that the liability cast on the accused reflects of charging 24 % interest on the outstanding amount due on the chitty transaction, whatever be the terms of contract entered by the parties, that definitely is a matter for the court to take into account in awarding of compensation. The realisation of interest at the rate of 24%, no doubt, is unconscionable, and the court cannot recognise a transaction claiming such high rate of interest. Such being the fact situation presented, I find, retaining the substantive term of imprisonment for one day, till the rising of the court, compensation awarded to the complainant in the present case has to be limited to Rs.12,000/- with default term of one month. Crl.R.P No.1110 OF 2010 7 Sentence is modified accordingly. The petitioner shall pay the compensation as modified above within one month. He shall appear before the Magistrate concerned on 01-09-2011 to serve out the sentence of imprisonment for one day, till the rising of the court and also to report the payment of compensation. In default of his appearance and nonpayment of the compensation, the learned Magistrate shall take steps to execute the sentence. Any amount deposited during the pendency of the proceedings shall be given credit to in the compensation, by the learned Magistrate. Revision is disposed of as above. vdv S.S.SATHEESACHANDRAN, JUDGE