IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.RAMKUMAR FRIDAY THE 4TH JULY 2008 / 13TH ASHADHA 1930 Crl.Rev.Pet.No. 3257 of 2007() ------------------------------ CRA.821/2006 of ADDL.SESSIONS JUDGE (ADHOC II) ERNAKULAM ST.1769/2003 of CHIEF JUDL.MAGISTRATE, ERNAKULAM .................... REVN. PETITIONER: REVN. PETITIONERS/APPELLANTS/ACCUSED ------------------------------------------------------ 1. SOWPARNIKA ARTS, 41/811, KUTTAN LANE, PULLEPPADY CROSS ROAD, ERNAKULAM, KOCHI-682 018, REPRESENTED BY ITS PARTNER, JAYASHANKER M. 2. JAYASHANKER M., AGED 39 YEARS, S/O. M.NARAYANANKUTTY MENON, 'PARVATHI', T.D.ROAD, ERNAKULAM, KOCHI-682 011. 3. V.M.NOUSHAD, AGED 39 YEARS, S/O. LATE A.B.MOHAMMED, 'AB MANZIL', C.P.UMMER ROAD, ERNAKULAM, KOCHI-682 035. 4. A.U.SABUDHEEN, AGED 37 YEARS, S/O. YUSUF, ANJIKKAPADATHU HOUSE, C.P.UMMER ROAD, ERNAKULAM, KOCHI-682 011. BY ADV. SRI.PHILIP T.VARGHESE SRI.M.F.MOHAMMOD SIYAD RESPONDENTS: RESPONDENTS/COMPLAINANT AND STATE ---------------------------------------------- 1. SHENOY CINEMAX, SHENOY CHAMBERS, SHANMUGHAM ROAD, ERNAKULAM, REPRESENTED BY ITS PARTNER, SURESH SHENOY, AGED 46 YEARS, S/O. A.L.S.SHENOY. 2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY PUBLIC PROSECUTOR SRI.P. RAVEENDRA BABU SRI.A.V.THOMAS FOR R1 SRI.JOJO GEORGE FOR R1 SRI.NIDHI SAM JOHNS FOR R1 THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 06/06/2008, THE COURT ON 4-07-2008 PASSED THE FOLLOWING: V. RAMKUMAR, J. * * * * * * * * * * * * * * * * * * Crl.R.P. No. 3257 of 2007 * * * * * * * * * * * * * * * * * * Dated: 04-07-2008 ORDER In this Revision filed under Section 397 read with Sec. 401 Cr.P.C. the revision petitioners consisting of a partnership firm by name Sauparnika Arts and its three partners who were respectively A1 to A4 in S.T. No. 1769 of 2003 on the file of the Chief Judicial Magistrate's Court, Ernakulam, challenge the conviction entered and the sentence passed against them concurrently by the Courts below for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “the N.I. Act” for short). The first respondent herein namely M/s. Shenoy Cinemax which is also a partnership firm was the complainant in the above case. The cheques which were the subject matter of these proceedings were Exts.P2 and P3 covering a total amount of Rs. 36,00,000/-. 2. I heard Adv. Philip T. Varghese the learned counsel appearing for the revision petitioners and Adv. Sri. A.V. Thomas, Crl.R.P. No. 3257 of 2007 -:2:- the learned counsel appearing for the complainant. 3. Adv. Sri. Philip T. Varghese, the learned counsel appearing for the revision petitioner made the following submissions before me in support of the revision:- The complainant had conveniently omitted to produce Ext.D1 original agreement dated 21-6-2002 and Ext.D3 supplementary agreement dated 16-5-2003. The non-production of those agreement by the complainant was willful. Those agreements will clearly show that there was no necessity for the accused to issue Exts. P2 and P3 cheques to the complainant. The Courts below failed to see that the transaction between the complainant and the accused was solely on the basis of the terms and conditions stipulated in Ext. D1 agreement and Ext.P3 supplementary agreement. Those agreements will further show that the case of the complainant that an additional loan of Rs. 20 lakhs was taken by the accused is improbable, if not false. The courts below overlooked the fact that Exts.P11 to P14 letters allegedly sent by the accused to the complainant were fabricated for the purpose of this case after those signed papers and the Crl.R.P. No. 3257 of 2007 -:3:- two signed cheques which were entrusted with DW2, (the financier) were treacherously procured by the complainant. The courts below have ignored the fact that the complainant has failed to prove the payment of Rs. 12 lakhs to M/s. Prasad Film Laboratory , Thiruvananthapuram. The courts below ought to have found that Exts. D1 to D10 and the testimony of DW1 have the effect of improbabilising, if not falsifying the case of the complainant and that the accused had thereby rebutted the presumptions under Sec. 118 and Sec. 139 of the N.I. Act. The courts below erred in finding that over and above the liability under Exts. D1 and D3, the accused had incurred an additional liability of Rs. 36 lakhs. The courts below failed to see that there were sufficient circumstances to show that Exts.P2 and P3 cheques were issued as signed blank cheques to the financier namely M/s. Ashok Investments, Chennai and the complainant had in collusion with the financier got possession of those cheques and filed the present case after converting those signed blank cheques into Exts.P2 and P3 cheques and after concocting the signed papers given in the letter-head of the accused into Crl.R.P. No. 3257 of 2007 -:4:- Ext.P11 to P13 letters. The courts below ought to have found that the contents of Ext.P15 letter reveals that it is a false document. 4. I am afraid that I cannot agree with the above submissions. 5. What has been unravelled by the averments in the complaint and the oral and documentary evidence adduced in the case is the following:- The complainant is a partnership firm by name Shenoy Cinemax engaged in the distribution and exhibition of films. The first accused is also a partnership firm by name Souparnika Arts engaged in the production and distribution of films. Accused Nos. 2 to 4 are the partners of the first accused firm. On 21-6-2002 the complainant and the accused entered into Ext.D1 agreement whereunder the accused agreed to assign the distribution rights of a Malayalam movie by name “Sadanandante Samayam” which was being produced by the accused staring Dileep, Kavya Madhavan and others. The said movie was to be released in the month of December 2002. The total Crl.R.P. No. 3257 of 2007 -:5:- consideration agreed upon for the assignment of the distribution rights of the above feature film in the State of Kerala was Rs. 95 lakhs out of which Rs. 81 lakhs was to be paid as advance before the release of the movie and the balance amount of Rs. 14 lakhs was to be paid after the release of the movie to be spent for the purpose of publicity etc. The 2nd accused examined as DW1 has admitted that the accused received the advance amount of Rs. 81 lakhs as provided under Ext.D1 agreement. In the said agreement the accused had asserted that they are the full and absolute owners of the distribution rights of the feature film and that no other party had any right, lien, charge or claim whatsoever in respect of the said movie. The agreement also provided that the accused would settle all the claims of the artists , technicians, outdoor units, labs etc. and would keep the said picture free from any claims whatsoever. However, the production of the film got delayed due to reasons attributable to the accused and release of the movie was re-scheduled on 16-5- 2003. On 10-5-2003 the accused as per Ext.P11 letter requested the complainant to pay Rs. 16 lakhs i.e. 12 lakhs to Crl.R.P. No. 3257 of 2007 -:6:- clear the dues to Prasad Laboratory, Thiruvananthapuram and Rs. 4 lakhs for post - production works. Although the complainant had parted with the sum of Rs. 81 lakhs as promised under Ext.D1 agreement, considering the the assurance given by the accused that the additional amount of Rs. 16 lakhs would be paid within one month of the date of the release of the movie, the complainant paid the further amount of Rs. 16 lakhs by paying Rs. 4 lakhs by way of cheque on 10-5-2003 directly to the accused and arranging Rs. 12 lakhs to be paid to Prasad Lab on 16-5-2003 through Kairali Theatres which owed amounts to the complainant. The said payment was also by means of cheques. At that time also the accused had assured the complainant that there was no other charge or lien over the film in favour of any other person and that the movie could be released without any impediment. On 13-5-2003 the accused informed the complainant as per Ext.P12 letter that in April 2003 they had borrowed money from Ashok Investments, a financier at Chennai represented by DW2 by pledging the negatives of the movie and a sum of Rs. 20 lakhs was due to Ashok Crl.R.P. No. 3257 of 2007 -:7:- Investments. The accused thus placed the complainant in such a predicament that without clearing the dues in favour of Ashok Investments the film could not be released. Left with no option, the complainant was compelled to pay the additional sum of Rs. 20 lakhs to the financier in the hope of getting the movie released soon. Ext.D3 supplementary agreement dated 16-5- 2003 was executed between the accused and the complainant specifically referring to Ext.P12 letter. The Annexure to the said agreement showed publicity expenses of Rs. 19.5. lakhs. On 16- 5-2003 the accused gave Ext.P13 letter dated 16-5-2003 along with which Ext.P2 post-dated cheque bearing the date 21-6- 2003 for Rs. 20 lakhs and Ext.P3 post - dated cheque bearing the date 21-6-2003 for Rs. 16 lakhs, were enclosed. As per Ext.P14 letter dated 20-5-2003 the accused informed the complainant with reference to Ext.D3 supplementary agreement that they are unable to undertake the newspaper publicity directly and requested the complainant to do the newspaper advertisement for the film which was being released on 22-5- 2003. In this letter the accused have confessed that they are Crl.R.P. No. 3257 of 2007 -:8:- very well aware of the implications which may follow consequent on their committing breach of agreement . On 22-5-2003 the film was released. Ext.D5 is a lawyer notice sent on behalf of the accused to DW2 the proprietor of Ashok Investments stating that the accused had availed a financial assistance of Rs. 20 lakhs from DW2 by pledging the negative of the film “Sadanandande Samayam” in favour of DW2 and at that time certain signed stamp papers, signed letter-heads, promissory notes, blank signed cheque leaves etc. had been entrusted with DW2 as demanded by him, that subsequently the accused had entered into Ext.P3 supplementary agreement with the complainant herein who had agreed to settle the entire amount of Rs. 20 lakhs due to DW2 directly and that the complainant herein had accordingly settled the entire dues. In that lawyer notice, a demand was made for return of the documents entrusted with D.W.2 at the time of availing of the loan. On 21-6-2003 the complainant sent Exts.P2 and P3 cheques for payment to the drawee bank. As per Exts.P4 and P5 dishonour memos both dated 24-6-2003 Exts. P2 and P3 cheques were dishonoured by Crl.R.P. No. 3257 of 2007 -:9:- the drawee bank. On 25-6-2003 Ext. P6 statutory notice was issued by the complainant to the accused. In the meanwhile, on 25-6-2003 the accused gave Ext.P15 receipt to D.W.2 acknowledging receipt of the documents which were entrusted with DW2 while availing of the loan of Rs. 20 lakhs. Eventhough the 2nd accused examined as DW1 had deposed that the accused did not receive back the documents entrusted with the financier, DW2 the financier who was examined as a defence witness categorically stated that all the documents were returned to the accused and Ext.P15 is the receipt issued in the handwriting and under the signature of the accused in that behalf. Exts.P7 to P9 are the postal acknowledgment cards dated 27-6-2003, 28-6-2003 and 27-6-2003 respectively evidencing due service of Ext.P6 statutory notice on A2 to A4 respectively who are the three partners of the first accused firm. Ext.P10 is the unclaimed returned envelop containing Ext.P6 statutory notice sent to the first accused firm. The complaint was filed on 8-7-2003 before the Chief Judicial Magistrate, Ernakulam. 5. The defence argument that Exts. P11 to P14 are Crl.R.P. No. 3257 of 2007 -:10:- documents which were concocted using the blank signed letter- heads given by the accused to DW2 while availing of the loan of Rs. 20 lakhs, cannot be accepted for a moment. Ext.P15 is the receipt signed by all the three partners of the first accused firm acknowledging receipt of the documents which were entrusted by them to DW2 while availing of the loan of Rs. 20 lakhs. If the accused had received back from DW2 all the documents entrusted by them with DW2, there is no possibility for the complainant to have access to those documents nor convert four of the signed letter-heads into Exts.P11 to P14. It is true that Exts.P11 to P14 contain the signatures of all the three partners. But it is pertinent to notice that none among accused Nos. 2 to 4 is a managing partner and that may be the reason why all the partners have signed in those letters. In Ext.P15 receipt also, all the three partners have signed. DW2, the financier who was examined on the side of the accused did not support the defence versions. On the contrary, he deposed that it was the complainant who discharged the loan of Rs. 20 lakhs availed by the accused. The alleged conspiracy or collusion between the Crl.R.P. No. 3257 of 2007 -:11:- complainant and DW2 is nothing but a cock and bull story conceived of by the accused to wriggle out of their liability. The courts below have carefully evaluated the oral and documentary evidence in the case to arrive at the conclusion that the accused have committed the offence as alleged. The conviction recorded against the revision petitioners/accused does not call for any interference and is confirmed. 6. What now survives for consideration is the question as to whether the sentence imposed on the revision petitioners is sustainable or not . The trial court had imposed a fine of Rs. 10,000/- on the first accused and on default to pay the fine to suffer simple imprisonment for three months. Accused Nos. 2 to 4 were each sentenced to simple imprisonment for six months and to pay fine of Rs. 12 lakhs and on default to pay the fine to undergo simple imprisonment for six months each. The total fine amount of Rs. 36,00,000/- (Rupees thirty six lakhs only) imposed on A2 to A4 as and when realised was directed to be paid to the complainant as compensation under Sec. 357 (1)(b) Cr.P.C. The lower appellate court modified the sentence deleting Crl.R.P. No. 3257 of 2007 -:12:- the default sentence imposed on the first accused. The lower appellate court also reduced the substantive sentence of imprisonment awarded to accused Nos. 2 to 4 from six months to one month. I do not think that penal servitude by way of incarceration is necessary in a prosecution of this nature. Accordingly, the sentence imposed on revision petitioners 2 to 4 (A2 to A4) is modified. A2 to A4 shall each pay a fine of Rs. 12 lakhs and on default to pay the fine the defaulting accused shall undergo simple imprisonment for three months. A2 to A4 are given four months time from today to pay to the complainant direct or to deposit the fine amount before the trial court. The sentence imposed on the first revision petitioner/ first accused is not interfered with. The first accused is given three months time to deposit the fine amount before the trial court. In the result this revision is dismissed confirming the conviction but modifying the sentence as above V. Ramkumar, Judge. ani/ Crl.R.P. No. 3257 of 2007 -:13:- ani/