IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN TUESDAY, THE 7TH APRIL 2009 / 17TH CHAITHRA 1931 CRL.A.No. 417 of 2002() --------------------------------- ST.2379/1999 of JUDL. MAGISTRATE OF FIRST CLASS COURT-I, THRISSUR .................... APPELLANT/PETITIONER/COMPLAINANT ---------------------------------------------------------- JOSEPH S/O. GEORGE, KAITHAKKATT PATHUR HOUSE, LALUR THRISSUR. BY ADV. MR.K.M.SATHYANATHA MENON RESPONDENT/RESPONDENT/ACCUSED & STATE ------------------------------------------------------------------------ 1. RAMAKRISHNAN, S/O.SANKARAN, EDAKKATTIL HOUSE, LALUR, THRISSUR. 2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM. R2 BY PUBLIC PROSECUTOR SMT.PUSHPALATHA M.K. R1 BY MR.P.RAVINDRAN, SENIOR ADVOCATE THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 07/04/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Rs/ S.S.SATHEESACHANDRAN, J. ------------------------------- CRL.APPEAL.NO.417 OF 2002 (C) ----------------------------------- Dated this the 7th day of April, 2009 J U D G M E N T Complainant is the appellant. His complaint against the 1st respondent for the offence under Section 138 of the Negotiable Instruments Act, in short, the 'N.I.Act', after trial, ended in a judgment of acquittal. Aggrieved by the judgment of acquittal, questioning its legality, propriety and correctness, complainant has preferred this appeal. 2. The case of the complainant is that towards discharge of a loan availed, the accused issued Ext.P1 cheque for a sum of Rs.1 lakh promising its encashment on presentation in due course. The cheque presented was, however, dishonoured due to insufficiency of funds in the account of the accused. Statutory notice issued intimating the dishonour and demanding the sum covered by the instrument was responded with a reply notice raising untenable contentions. The amount covered by the cheque was not paid, and the complainant CRL.A.417/02 2 launched the prosecution against the accused for the offence under Section 138 of the N.I.Act. 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 P9 to prove his case. The accused when questioned under Section 313 of Cr.P.C., maintained his innocence. Admitting that there was a loan transaction between him and the complainant for a sum of Rs.1 lakh, the accused contended that the loan was given after collecting a cheque for Rs.1 lakh and also a signed blank stamp paper from him as security. The loan amount was repaid in instalments, but the demand for the return of the cheque and the blank signed stamp paper was not heeded to, was the version of the accused. To substantiate his defence, the accused exhibited in evidence Exts.D1 to D4. 4. The learned Magistrate, after appreciating the materials produced by both sides, found that the case advanced by the complainant imputing the offence under CRL.A.417/02 3 Section 138 of the N.I.Act against the accused is not sustainable and the version canvassed by the defence is more probable. In forming that conclusion, the impugned judgment of acquittal was rendered in favour of the accused absolving him of the offence. 5. I heard the learned counsel for the complainant/appellant. 6. The execution of Ext.P1 cheque and handing over that instrument towards discharge of a loan transaction was admitted by the accused, and when that is so, the complainant is entitled to the presumption under Section 139 of the N.I.Act., that the instrument had been issued in respect of whole or part of a debt or liability, is the submission of the counsel. It is further contended that when a plea of discharge was canvassed by the accused to evade from the penal consequences arising of dishonour of the cheque, which, admittedly, arose from his account, the burden was on the accused to establish by satisfactory evidence that the entire CRL.A.417/02 4 loan had been discharged. The accused has failed to prove the discharge by tendering any worthmentioning document and the plea canvassed by him deserved only outrage rejection as unworthy of any merit, is the submission of the learned counsel. On the proved facts and circumstances involved in the case, the learned counsel submits that the accused has to be found guilty of the offence under Section 138 of the N.I.Act and in reversal of the judgment of acquittal passed by the learned Session Judge, it us urged, conviction be founded on the accused for the said offence. 7. I have perused the records of the case giving consideration to the submissions made by the learned counsel for the complainant. In an appeal arising from a judgment of acquittal, the appellate court is fully empowered to reappreciate the evidence but still a note of caution is warranted since the judgment of acquittal reinforce the plea of innocence canvassed by the accused. The first question that emerges for consideration is whether the transaction alleged by the complainant relating to the issue of Ext.P1 cheque to prosecute the accused for the offence under Section 138 the CRL.A.417/02 5 N.I.Act is honest and bona fide. The allegation raised in the complaint and also the materials produced by him to sustain his case require to be scrutinized to appreciate the merit of his case. In the present case, it is seen, the accused had admitted the loan transaction with the complainant and, further, conceded the issue of Ext.P1 cheque, but with a defence that Ext.P1 cheque was handed over along with a blank signed stamp paper as security. The cheque was handed over not later but at the time of transaction, is the case of the accused. True, in the nature of the defence canvassed if the complainant is able to show that the transaction covered by Ext.P1 cheque was honest and bona fide then necessarily the entire burden would have fallen on the accused to rebut the presumption under Section 139 of the N.I.Act, available in favour of the complainant on the admitted execution of the instrument. That is not the case here. Before launching prosecution, by filing the complaint against the accused, that is, even before the issue of an advocate notice to the accused on dishonour of the cheque, it has been proved by the materials produced by the accused that the complainant had issued an earlier notice setting up a case that CRL.A.417/02 6 there was another transaction between the parties based on an agreement of sale executed by the accused agreeing to transfer his property for a sum of Rs.2,50,000/- and an amount of Rs.1 lakh had been collected by him as advance. Disputing that case of the complainant, the accused had sent a reply notice that there was no agreement of sale but only a loan transaction in respect of which he had given a cheque and also a blank signed stamp paper as security. Ext.D1 is the notice sent by the complainant directing the accused for specific performance of the agreement of sale with a threat of proceeding against him before the proper forum in the event of non compliance of the demand. Ext.D2 is the reply given by the accused to Ext.D1 notice. The evidence of the complainant when examined as PW1 would indicate that pursuant to Ext.D1 notice, he had instituted a suit as O.S.No.491/1998 before the Principal Sub Judge, Thrissur for specific performance of the agreement of sale which is alleged to have been executed by the accused. He also admitted Ext.D1 notice and also the receipt of Ext.D2 reply notice. If the case of the complainant is to be believed, after the parties entered into an agreement of sale and an advance of Rs.1 lakh was paid to the CRL.A.417/02 7 accused under that agreement of sale, he gave him a loan for Rs.1 lakh without collecting any security. If at all he had paid any amount after the agreement of sale, it is reasonable to presume that the sum would have been adjusted in the balance sale price payable. The candid admission of the accused that there was a loan transaction with the complainant and that he had given a cheque while disputing the agreement of sale alleged in Ext.D1 notice, adds credence to his version that the cheque and a blank signed stamp paper were given as security for the loan. There is reason to doubt that an agreement of sale was brought into existence on the blank signed stamp paper, and proceedings thereof were initiated against the accused. Since the dispute relating to agreement of sale is pending before the civil court for adjudication, I do not want to make any further comments. Needless to point out that the observations of this Court in the criminal case is not binding on the civil court, still, I make it clear that whatever observation made as above will be applicable only in respect of the present case alone. The evidence of the complainant is to the effect that the agreement of sale was executed on 25.7.1997 and on that date, an CRL.A.417/02 8 advance of Rs.1 lakh was paid. So far as the loan transaction is concerned, it is his case the amount of Rs.1 lakh was paid two days before the date shown in the cheque and such amount was paid not as a whole but piecemeal in several instalments. He could not state on which dates the amount of Rs.1 lakh was given to the accused. But he asserted that the amount was given in four or five instalments, and such payments and handing over of Ext.P1 cheque were after the transaction covered by the agreement of sale. Without making any reference to the agreement of sale, in respect of which he had already issued a notice to the accused and a reply received disputing such agreement of sale, the complainant had issued statutory notice and launched the prosecution proceedings against the accused by filing the complaint raising allegations that there was a loan transaction and later the cheque was issued towards discharge of that liability. Having regard to the totality of the facts and circumstances presented in the case, the learned Magistrate correctly came to the conclusion that the case presented by the complainant was not worthy of any merit and the defence of the accused was probable. The accused need not establish CRL.A.417/02 9 his defence beyond the shadow of doubt as is the case of the prosecution since he need only show that by the test of preponderance of probabilities, his version is probable and acceptable. The fairness of the accused in admitting the loan transaction even in the reply notice to Ext.D1, the previous notice issued by the complainant, and the circumstances canvassed by him during trial, adds credence to his defence. There is no merit in the appeal and the judgment of acquittal passed by the court below deserves only to be upheld. I do so. Appeal is dismissed. S.S.SATHEESACHANDRAN JUDGE prp S.S.SATHEESACHANDRAN, J. -------------------------------------------------------- CRL.A.NO.417 OF 2002 (C) --------------------------------------------------------- J U D G M E N T --------------------------------------------------------- 7th April, 2009