IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MRS. JUSTICE M.C.HARI RANI MONDAY, THE 6TH APRIL 2009 / 16TH CHAITHRA 1931 Crl.MC.No. 3890 of 2005() ------------------------- CC.876/2003 of JUDL. MAGISTRATE OF FIRST CLASS-I, KOCHI .................... PETITIONERS: ACCUSED. --------------------------- 1. P.KRISHNANKUTTY NAIR, A.K.TEXTILES, UDYIYANKULANGARA, AMARAVILA P.O. THIRUVANANTHAPURAM. 2. ANIKUTTAN A.K. PROPRIETOR A.K.TEXTILES, UDIYANKULANGARA, AMARAVILA P.O. THIRUVANANTHAPURAM. BY ADV. SRI.K.RAMAKUMAR, SENIOR ADVOCATE SRI.A.SAMEER RESPONDENT(S): STATE AND COMPLAINANT. ------------------------------------- 1. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. 2. MEHTA PRIVATE LIMITED, A COMPANY REGD. UNDER THE COMPANIES ACT, 1956, HAVING ITS REGD. OFFICE AT MUMBAI & REP. POWER OF ATTORNEY HOLDER/P RINCIPAL OFFICER OF ERNAKUALAM BRANCH, MR.RENJTIH KUMAR BHATT, BROADWAY ERNAKULAM. PUBLIC PROSECUTOR SHRI THOMAS JOHN AMBOOKKEN FOR R2 SRI.DINESH R.SHENOY FOR R2 THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 06/04/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ORDER ON CRL.M.A.NO.14171/05 IN CRL.M.C.NO.3890/05 //DISMISSED// 6.4.09 SD/-M.C.HARI RANI, JUDGE. M.C. HARI RANI, J. ====================== CRL.M.C.NO. 3890 of 2005 ======================= Dated this the 6th day of April 2009 ORDER Petitioners 1 and 2 have filed this petition under Section 482 of the Code of Criminal Procedure with the prayer to set aside Annexure-D order. Annexure-D is the copy of the order dated 9-9-2005 in C.M.P.No.2081/2001 in C.C.No.876/2003 passed by the learned Judicial First Class Magistrate-I, Kochi. In the said order it is mentioned that the said petition was filed by the complainant,2nd respondent herein to take cognizance of offence under Sections 420 and 120B of the Indian Penal Code. The respondent in that petition is the accused in the case filed for the offence under Section 138 of the Negotiable Instruments Act and is the 2nd petitioner herein. As per that order, the learned Magistrate has allowed the petition taking cognizance of the offence under Sections 420 and 120B of the Indian Penal Code against the accused and Mr.Krishnankutty CRMC. 3890/2005 -2- Nair. Cognizance of offence under Section 417 of I.P.C.was also taken against the first accused. Paragraph 19 of the impugned order reads as follows: “In the instant case when Ext.P2 cheque returned dishonoured ‘Exceeds arrangement' by the bank and default in payment in spite of Ext.P4 notice resulted an act of offence under Section 138 of N.I.Act and the offence u/s.420 I.P.C.has ensued as a consequence on the disclosure statement of DW-1 and subsequent proof during the trial before this court. I am of opinion that this court has jurisdiction to try the offence as per Sec.179 and S.180 Cr.P.C.” This order has been challenged by petitioners 1 and 2 in this petition. 2. The statement of facts as alleged in this petition and as revealed from the documents produced by the petitioners and also the second respondent are as follows:- The second respondent is a registered company dealing with wholesale textile business. The company through the power of attorney holder filed a complaint dated 10-1-2003 before the Chief Judicial CRMC. 3890/2005 -3- Magistrate's Court, Ernakulam, copy of which is produced as Annexure-A which was taken cognizance by the learned Magistrate for the offence under Section 138 of the Negotiable Instruments Act and the same is pending before the Court of Judicial First Class Magistrate-I, Kochi as C.C.No.876/2003. Trial was started in that case. PW1 was examined and Exts. P1 to P8 were marked on the side of the complainant. Thereafter, DWs.1 and 2 were examined and Exts.D1 to D4 were marked. Evidence was closed on 10-6-2005. On 14-6-2005 on the basis of the evidence of DW2 and on the basis of documents Exts.D3 and D4, petition was filed by counsel for complainant to reopen complainant's evidence. Copy of that petition is produced by the complainant/first respondent herein as Document No.9. Thereafter, the Manager of S.B.T. Udayankulangara branch, Thiruvananthapuram was examined as PW2 on 28-6-2005 and marked Ext.P9 to P11 on the side of the complainant. On 30-6- 2005, two petitions were filed by the complainant, copy of which are produced as Annexures B & C along with this petition. In Annexure-B it was alleged that during trial when DW1 was examined before court, he deposed that he has signed and issued CRMC. 3890/2005 -4- Ext.P2 cheque but the account is maintained by his father Mr.Krishnan Kutty Nair. It was also alleged in that petition that the accused and Mr.Krishnankutty Nair deceived the complainant by fraudulently issuing the cheque to the complainant making to believe that the accused is the account holder and proprietor of A.K.Textiles and has got sufficient funds in his account to encash the cheque. By the said illegal act of the accused, wrongful loss and damages caused to the complainant to the tune of Rs.40,000/- in this incident. So, the prayer made in that petition is to take cognizance under Sections 420 and 120B of I.P.C. Objection was filed by the second petitioner herein, the sole accused in C.C.No.876/2003, copy of which is produced as document No.7. In the petition, Annexure-C filed under Section 319 of Cr.P.C.the same allegations were raised by the complainant that the accused and his father Krishnankutty Nair have agreed together to deceive the complainant and with the knowledge and consent of Krishnankutty Nair, the accused had issued the cheque to the complainant. So, the accused and the account holder Krishnankutty Nair have colluded together and committed offence under Section 420 and 120B of the Indian CRMC. 3890/2005 -5- Penal Code. Accordingly, it was prayed to take cognizance for the offence under Sections 420 and 120B of I.P.C. and to proceed against Mr. Krishnankutty Nair as second accused and to issue process to him. In that petition also the objection has been filed by the accused, copy of which is produced as document No.8. In the objections, document Nos.7 and 8, it was contended by the accused that none of the ingredients necessary to attract offence under Section 420 of I.P.C. is there in the lawyer notice, complaint, proof affidavit as well as in the course of evidence till date and that there was no collusion with Krishnan Kutty Nair and the accused as alleged in the petition. It was also contended that the cheque,Ext.P2 was issued for a pre-existing liability and it would not attract criminal offence under Section 420 and prayed to dismiss both petitions. 3. After hearing both counsel and considering the averments in the petition and also the contentions in the objections filed by the respondent, the impugned order was passed by the learned Magistrate whereby the petition was allowed as above mentioned. 4. Heard the learned counsel appearing for the CRMC. 3890/2005 -6- petitioners and for 2nd respondent. 5. It is submitted by the learned counsel for petitioners that as per the impugned order, the learned Magistrate ordered to take cognizance of offence under Sections 420 and 120B of I.P.C. against the accused and his father Mr. Krishnan Kutty Nair and cognizance of the offence under Section 417 of I.P.C. was also taken against the first accused, which is to be set aside. It is also submitted that the offence alleged originally against the sole accused was under Section 138 of the Negotiable Instruments Act which is a summons case in which there is no provision in the Cr.P.C. to add another charge. There was no case for the complainant,2nd respondent herein, in Annexure-A complaint that the petitioners had the intention of cheating from the very beginning of the business transactions so as to attract the offence under Section 420 of I.P.C. Though the offence under Section 420 of I.P.C.was mentioned in Annexure-A complaint, the learned Magistrate took cognizance of the case under Section 138 of the Negotiable Instrument Act only against the accused for the reason that there was no sufficient ingredients to attract the offence under Section 420 of I.P.C. CRMC. 3890/2005 -7- 6. According to the respondent’s counsel, the delivery of goods and issuance of cheque were simultaneous transactions and on the basis of the evidence adduced by the parties, the learned Magistrate in exercise of the discretionary power allowed both petitions and proceeded further under Section 216 of Cr.P.C. for alteration of charge. According to the learned counsel, the accused purchased the goods as proprietor of A.K.Textiles, who has no power to sign as such and issued the cheque, which was accepted by the complainant as good payment in connection with delivery of property. The accused thus intended to cheat the complainant on the first instance itself by issuing the cheque of somebody else which is a clear evidence, it is submitted. 7. It is revealed from Annexure-A complaint that the transaction between the parties were in between 10-4-2002 to 2-8-2002 and the definite case of the accused, 2nd petitioner herein that Ext.P2 cheque was issued by him only subsequently. The said transactions was alleged in the complaint, Annexure-A and in the lawyer notice, document No.1 produced by the second respondent that in the usual and ordinary course of business during the period 10-4-2002 to 2-8-2002 the accused,2nd CRMC. 3890/2005 -8- petitioner herein purchased textile goods from the business concern of the complainant on credit basis and an amount of Rs.1,28,898/- was due from the accused to the complainant. Towards partial discharge of the said liability the accused issued the cheque, Ext.P2 dated 29-10-2002 for an amount of Rs.40,000/- which was dishonoured when sent for encashment with the endorsement 'exceeds arrangement’ in the account of the accused. 8. In paragraph 4 of Annexure-A complaint it was stated as follows: “At the time of the issuance of the cheque the accused made believe the complainant that there is sufficient fund in his account to encash the cheque otherwise complainant would not have accepted the cheque. With mala fide intention accused cheated the complainant”. Thereafter on 20-12-2002 the complainant issued lawyer notice to the accused intimating the fact of dishonour of the cheque and demanded to pay the cheque amount within 15 days of receipt of notice, copy of which is produced as document No.1 by the second respondent. The accused sent a reply to that notice, copy CRMC. 3890/2005 -9- of which is produced as document No.2. It was thus alleged that the accused committed the offence under Section 138 of the Negotiable Instruments Act as well as the offence punishable under Section 420 of I.P.C. It is evident from the complaint itself that there was no sufficient averments therein regarding the intention of cheating at the time of issuance of the cheque, which according to the accused, was issued by him subsequently on 19-8-2002. At any rate the cheque is dated 29-10-2002 as admitted by both parties. Evidently, the allegation of the complainant originally was that the accused committed the offence under Section 138 of the Negotiable Instruments Act and evidence was let in by both parties to that effect. Subsequently on the basis of the evidence of Dws.1 and 2, the complainant prayed to alter the charge under Section 420 of I.P.C. Section 420 of I.P.C. reads as follows: “Cheating and dishonestly inducing delivery of property,-Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, CRMC. 3890/2005 -10- and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.” 9. No allegations are there in the complaint, Annexure-A to show the existence of the ingredients of the aforementioned provisions. In the complaint ingredients of the offence under Section 420 are not specifically alleged. The only wording was that “with mala fide intention accused cheated the complainant”. Thereafter, on the basis of the evidence in the case, it was prayed that the charge may be altered and petitions were filed by the complainant for the same. Thus, it is left for consideration and the question is as to whether in a situation of this nature any offence of cheating can be said to have been made out. 10. Section 415 of I.P.C. as follows: “Cheating,-Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to delver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do CRMC. 3890/2005 -11- anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”. 11. The ingredients of Section 420 of I.P.C.are (i)Deception of any person (ii) Fraudulently or dishonestly inducing any person to deliver any property; (iii)To consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit. 12. No act or inducement on the part of the petitioners has been alleged by the 2nd respondent either in Annexure-A complaint or in the evidence adduced by him as PW1 before the Magistrate's Court. So also no allegation has been made out that the petitioners had an intention to cheat the second respondent from the very inception. What has been alleged in the complaint was that the transaction between the parties were from 10-4- 2002 to 2-8-2002. It is also alleged in the complaint that to discharge the liability incurred by the second petitioner in this CRMC. 3890/2005 -12- petition in connection with those transactions, he issued the cheque to the complainant on 29-10-2002. So, the definite case of the complainant himself is that the cheque was issued to discharge an antecedent debt. To attract Section 420 of I.P.C. there must be dishonest inducement and delivery of property or any valuable security. 13. In the light of the specific averments that the cheque was issued to discharge an antecedent debt, no amount of evidence will salvage the situation. Even in the evidence, the complainant,PW1 has no case to the effect that when the cheque was issued, there was any delivery of property or valuable security. No evidence has been let in by the complainant regarding the date of issuance of the cheque,Ext.P2 either in the complaint or in the oral evidence. In any view of the matter Section 420 of I.P.C.is not attracted in the present case and the charge cannot be altered as is done by the learned Magistrate in the impugned order. For the reasons above mentioned, the impugned order,Annexure-D is set aside. This petition is allowed accordingly. This order will not preclude the complainant from CRMC. 3890/2005 -13- initiating proceedings against the petitioners herein afresh in accordance with law, if so advised. M.C. HARI RANI JUDGE ks. CRMC. 3890/2005 -14-