IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 10TH FEBRUARY 2009 / 21ST MAGHA 1930 CRL.A.No. 1488 of 2003 (ST.114/2002 of JUDL FIRST CLASS MAGISTRATE COURT-V, TRIVANDRUM) .................... APPELLANT/COMPLAINANT: ---------------------------------------- MOHAMMED SHAH, CHIEF EXECUTIVE, STAR ADVERTISING AND MARKETING, 4TH BUILDING LEFT GANDHIPURAM MAIN ROAD, SREEKARIYAM P.O., THIRUVANANTHAPURAM. BY ADV. SRI.P.JACOB VARGHESE, SENIOR ADVOCATE RESPONDENT/ACCUSED: ----------------------------------- MR.D.C. RAJENDRA KUMAR S/O. CHELLAYYA, SANTHA AYURVEDIC PRODUCTS, INDUSTRIAL ESTATE, PAPPANAMCODE, THIRUVANANTHAPURAM ADV. SRI.B.SATHIQ FOR R1 THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 10/02/2009 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V.K.MOHANAN, J. --------------------------------------------- Crl.A.No. 1488 of 2003 --------------------------------------------- Dated this the 10th day of February, 2009 J U D G M E N T This appeal is at the instance of the complainant in a prosecution for the offence punishable under Section 138 of the Negotiable Instruments Act,1881 (for short 'the N.I.Act'). He is challenging the judgment dated 2.5.2003 of the Judicial First Class Magistrate Court -V, Special Court for Marklist Cases, Thiruvananthapuram in S.T.No.114 of 2002 by which the accused is acquitted under Section 255(1) of the Code of Criminal Procedure holding that the offence under Section 138 of the N.I.Act will not attract if the cheque is issued as a security. 2. The case of the complainant is that the accused borrowed a sum of Rs.50,000/- from the complainant on 20.8.1997 and the accused gave a postdated cheque for the said amount bearing No.416568 dated 25.12.1999. When the said cheque was presented for encashment, the same was dishonoured for the reason, insufficiency of fund. Thereafter, on getting the dishonour memo, a statutory notice was sent to the accused by registered post calling upon him to pay the Crl.A.No. 1488 of 2003 :-2-: cheque amount. The accused did not care to pay the amount in spite of receipt of the demand. Hence, he filed the complaint and when the accused appeared, the particulars of the allegations were read over and explained to him to which he pleaded not guilty. Therefore, the trial was continued during which PW1 was examined and Exts.P1 to P4 documents were marked from the side of the complainant. The incriminating circumstances, which emerged during the evidence of the complainant, when put to the accused, he denied the same. From the side of the defence, Dws.1 and 2 were examined and Exts.D1 and D2 were produced and marked as defence exhibits. On the basis of the rival pleadings and materials on record, three points were framed by the court below for its consideration. The first question formulated is whether the complaint is maintainable and the second question is whether the disputed cheque is issued by the accused to the complainant for the discharge of liability of Rs.50,000/- as alleged. The trial court found that the complaint is not maintainable especially on the basis that in Ext.P3 demand notice, the complainant has stated that the cheque in question was issued as a security and therefore, there is no demand as contemplated by Section 138 of the N.I.Act and therefore, there is Crl.A.No. 1488 of 2003 :-3-: no cause of action for prosecution under Section 138 of the N.I.Act. Thus, accordingly, the court below found that the accused is not guilty for the offence under Section 138 of the N.I.Act and he is accordingly acquitted. It is the above finding and order of acquittal challenged in this appeal. 3. I have heard Mr.Jacob Varghese, learned senior counsel appearing for the appellant and also learned counsel appearing for the respondents. 4. Counsel for the appellant submits that learned Single Judge of this Court, in a decision reported in General Auto Sales v. Vijayalakshmi [2005(1) KLT 478], has held that even if a blank cheque has been issued as a security, the person, on the basis of blank cheque, can enter the amount of liability and present it to bank. It is further held that when a blank cheque is issued by one to another, it gives an authority on the person to whom it is issued to fill it up at appropriate stage with the necessary entries regarding the liability and present it in the bank. Thus, according to the learned single Judge, the accused cannot be absolved from the liability. The same position is reiterated in the decision reported in Moideen v. Johny [2006(3) KLT SN 62 (Case No.85). Another learned single Judge of this Crl.A.No. 1488 of 2003 :-4-: Court in Rathikumar v. Santhamma [2006(4) KLT 308] has held that the admission that the cheque was issued as security for 'ഉറപലകയ' repayment of the loan does not take the transaction out of the sweep of S.138 and the same only conveys that the lending/borrowing was on the strength of the cheque. The above two decisions were arrived at after considering the judgment of the Apex Court reported in I.C.D.S.Ltd. v. Beena Shabeer [2002(3) KLT 218 (SC)]. 5. In the light of the above settled position of law, even if a blank cheque is issued as security, the accused cannot escape from the penal liability. It is true that the impugned judgment is dated 2.5.2003 and the above decisions of this Court are pronounced subsequently. But the legal position is the same as the judicial pronouncement is only being the declaration of law as it is in the statute. Therefore, the finding of the court below is incorrect and liable to be set aside. Hence, the impugned judgment is set aside. 6. As per the impugned judgment, the trial court has not gone into the details and merits of the case and as such the decision was purely on the basis of the maintainability of the case Crl.A.No. 1488 of 2003 :-5-: of the complainant. Therefore, it is only proper to remand the matter back to the trial court for fresh consideration, in the light of the above settled position of law. In the result, the appeal is allowed. The impugned judgment is set aside, so as to enable the court below to come to a fresh decision on merit, after hearing the parties on record. The parties are directed to appear before the court below on 11th March, 2009 on which date the court below is directed to take up the complaint on file and to proceed with the same and dispose of it on merit, after hearing the parties concerned. As the matter relates to the year 2003, the trial court will ensure the expedite disposal of the matter. V.K.Mohanan, Judge MBS/ Crl.A.No. 1488 of 2003 :-6-: V.K.MOHANAN, JJ. -------------------------------------------- Crl.A.NO. OF 200 -------------------------------------------- J U D G M E N T Crl.A.No. 1488 of 2003 :-7-: DATED: -1-2009