IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS THURSDAY, THE 9TH DECEMBER 2010 / 18TH AGRAHAYANA 1932 CRL.A.No. 500 of 2004() ----------------------- AGAINST THE JUDGEMENT/ORDER IN CRLP.179/2004 Dated 18/03/2004 CC.494/2002 of JUDL. MAGISTRATE OF FIRST CLASS COURT-III, TRIVANDRUM .................... APPELLANT(S): COMPLAINANT. -------------------------- UDAYAKUMAR, SREEPURAM BUNGLOW, SREEPURAM LANE, POOJAPPURA, THIRUVANANTHAPURAM. BY ADV. SRI.M.SREEKUMAR RESPONDENT(S): ACCUSED AND STATE. --------------------------------- 1. THAJUMA BEEGUM, PARAYIL PUTHENVEEDU, PARUMALA, PULLAMPARA P.O. NEDUMANGADU, THIRUVANANTHAPURAM. 2. THE STATE OF KERALA, REP. BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. ADV. SRI.M.RAJAGOPALAN NAIR FOR R1 SRI.G.BIJU FOR R1 R2 BY PUBLIC PROSECUTOR SHRI. MUHAMMED PUZHAKKARA THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 01/12/2010, THE COURT ON 09/12/2010 DELIVERED THE FOLLOWING: M.L. JOSEPH FRANCIS, J. - - - - - - - - - - - - - - - - - - - - - - - - - - Crl.A. No. 500 of 2004 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 9th day of December, 2010 JUDGMENT This appeal is filed by the complainant in C.C. No. 494 of 2002 on the file of Judicial First Class Magistrate Court -III, Thiruvananthapuram. The first respondent herein is the accused in that case, which was filed by the complainant alleging commission of the offence under Section 138 of N.I. Act. 2. The case of the complainant is briefly as follows. The first respondent borrowed an amount of Rs. 10 lakhs from the complainant and since the money is not returned after repeated requests, he filed a civil suit before the Sub Court, Thiruvananthapuram as O.S.No. 119 of 2001 for recovery of money. During the pendency of the suit, the parties entered into a compromise and accordingly a Crl.A. No. 500 of 2004 2 compromise decree was passed. According to the terms of the compromise, the first respondent has to pay Rs.5,50,000/- to the complainant. Rs. 2 lakhs was paid in cash and for the balance amount of Rs. 3.5 lakhs, a cheque drawn on the Thiruvananthapuram District Co-operative Bank, Venjaramoodu dt. 20.9.2001 was issued. When the said cheque was presented for encashment, it was dishonoured due to insufficiency of funds. Though a lawyer notice was issued to the accused intimating the dishonour of the cheque, no amount was paid. Hence the complaint. 3. In the Magistrate Court, on the side of the complainant PW1 was examined and Exts.P1 to P9 were marked. On the defence side the husband of the accused was examined as DW1 and Ext.D1 was marked. The learned Magistrate, on considering the evidence, found that Ext.P1 cheque was dishonoured for want Crl.A. No. 500 of 2004 3 of sufficient funds in the account of the accused and that the complainant has complied with the requirement of sending demand notice within time and the accused failed to pay the amount covered by Ext.P1 cheque. But the accused was acquitted under Section 255(1) Cr.P.C. on the ground that Ext.P1 cheque was not issued towards discharge of a legally enforceable debt. Against that judgment of acquittal, the complainant filed this appeal. 4. Heard the learned counsel for the appellant and the learned counsel for the first respondent. 5. The learned counsel for the appellant made the following submissions. The court below ought to have found that the allegation with respect to the non-compliance of condition in Ext.D1 compromise petition is immaterial since that is with respect to a different transaction between strangers to the present litigation viz. the brother-in-law of the complainant and the husband of the Crl.A. No. 500 of 2004 4 first respondent. He further submitted that the court below ought to have found that if at all the compliance of the said condition is material, the same is complied with since the complaint given at Dubai is withdrawn and the cheque was handed over to the husband of the respondent. When one party to a compromise decree did not comply with the terms of the compromise, the remedy available to the other party is to seek the execution of the decree and not to withdraw from his obligation under the decree. 6. The learned counsel for the appellant submitted that the execution of the cheque is admitted by the first respondent/accused and she failed to rebut the presumption under Section 139 of the N.I. Act. Hence the acquittal of the accused is not justified. The court below ought to have found that the complainant has fully complied with the terms of the compromise except the impossibility, viz. handing over of N.O.C. to the husband of the Crl.A. No. 500 of 2004 5 first respondent. The failure to hand over N.O.C. and its consequences is nothing but a lame excuse for non-payment of the money covered by Ext.P1 cheque. The learned counsel for the first respondent supported the judgment of the court below. 7. The complainant was examined as PW1. He deposed that the accused borrowed an amount of Rs.10 lakhs from him and as the accused failed to repay the amount, he filed a civil suit against the accused as O.S.No. 119 of 2001 before the Sub Court, Thiruvananthapuram. During the pendency of the suit, the parties entered into a compromise and accordingly a compromise decree was passed. PW1 deposed that as per the compromise the accused had to pay Rs.5,50,000/- to him, out of which the accused paid Rs.2 lakhs to him in cash and for the balance amount the accused issued Ext.P1 cheque for Rs. 3.5 lakhs. When that cheque was presented for encashment, it was dishonoured due to insufficiency Crl.A. No. 500 of 2004 6 of funds in the account of the accused. Ext.P2 is the intimation memo and Ext.P3 is the cheque return memo. 8. PW1 sent a lawyer notice to the accused, which was accepted by him. Ext.P4 is the copy of the lawyer notice and Ext.P6 is the postal acknowledgment card. Ext.P7 is the reply notice issued by the accused. PW1 deposed that even after receipt of the lawyer notice, the accused did not pay any amount. 9. The accused admitted the execution of Ext.P1 cheque, which was a post dated cheque. Ext.D1 is the copy of the decree in O.S.No. 119 of 2001 on the file of the Sub Court, Thiruvananthapuram. According to the defence, the complainant failed to comply with the other terms of the decree and accordingly the accused is not bound to pay any amount to the complainant and hence the debt claimed is not enforceable in law. 10. The husband of the accused was examined as DW1. He deposed that apart from the civil litigation, which was finally Crl.A. No. 500 of 2004 7 compromised, there was another complaint filed against DW1 in Abudabi. One of the terms in the compromise decree was that the complaint filed against DW1 had to be withdrawn and the complainant had to obtain an N.O.C. and that had to be handed over to the accused. That term was not complied with by the complainant and hence Ext.P1 issued in compliance with the decree cannot be encashed by the complainant. The term of obtaining N.O.C. and handing it over to the accused was said to be a condition pre-requisite for encashing Ext.P1. 11. The complainant is not disputing the terms of Ext.D1 decree, including the condition of obtaining and handing over of N.O.C. to the accused. But the version of the complainant is that the complaint filed against DW1 has been withdrawn and hence he has substantially complied with the terms of the decree and the debt of Rs. 3.5 lakhs is enforceable against the accused. Crl.A. No. 500 of 2004 8 12. Ext.D1 decree makes it clear that Ext.P1 cheque was issued with a date posterior to the issuance of the cheque. The compromise decree was passed on 16.3.2001. Ext.P1 had to be encashed on 20.9.2001. The term for N.O.C. was that within 15 days from 16.9.2001 the complainant shall obtain the N.O.C. and shall hand it over to the accused. Hence the above term can be considered as a condition pre-requisite for claiming the amount covered by Ext.P1. The complainant has no case that he has obtained the N.O.C. and handed it over to the accused. 13. Since the complainant had not fully complied with the stipulations contained in Ext.D1 compromise decree, on the basis of which Ext.P1 cheque was issued, that cheque became not enforceable and as such the learned Magistrate is fully justified in finding that it cannot be said that Ext.P1 cheque was issued towards discharge of a legally enforceable debt or liability. Crl.A. No. 500 of 2004 9 14. Accordingly this appeal is dismissed, as it is without any merit. (M.L. JOSEPH FRANCIS) Judge tm