IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN FRIDAY, THE 27TH MARCH 2009 / 6TH CHAITHRA 1931 CRL.A.No. 242 of 2002() ----------------------- ST.235/1999 of CHIEF JUDICIAL MAGISTRATE COURT, PALAKKAD .................... APPELLANT/COMPLAINANT ----------------------------------------- M. PRABHAKARAN, S/O. P. MEENAPPA MOOTHAN, HOUSE NO.33/47, NEAR WATER TANK, DEVI NAGAR, VADAKKANTHARA AMSOM, PALAKKAD. BY ADV. MR.P.VIJAYA BHANU SMT.P.MAYA RESPONDENTS/ACCUSED AND STATE ------------------------------------------------------- 1. MOHANDAS, S/O.NARAYANA PANICKER, PROPRIETOR OF SASTHA FLOUR MILL IN FRONT OF POWER STATION, VENNAKKARA, PALAKKAD. 2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. R2 BY PUBLIC PROSECUTOR SMT.PUSHPALATHA R1 BY ADV. MR.V.CHITAMBARESH THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 27/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Rs/ S.S.SATHEESACHANDRAN, J. ------------------------------- CRL.A.NO.242 OF 2002 (A) ----------------------------------- Dated this the 27th day of March, 2009 J U D G M E N T Complainant is the appellant. The complaint filed by him for prosecuting the respondents/accused for the offence punishable under Section 138 of the Negotiable Instruments Act, for short the 'N.I.Act', after trial, ended in a judgment of acquittal in favour of the accused. Challenging the legality, propriety and correctness of that acquittal, he has preferred this appeal. 2. The case of the complainant is that, the accused had borrowed a sum of Rs.50,000/- from him executing a promissory note agreeing to repay the sum with interest at 18% per annum. Subsequently, when demand was made for repayment, it is his case that Ext.P1 cheque was issued for a sum of Rs.60,000/-, promising its encashment on presentation in due course. The cheque presented was, however, CRL.A.242/02 2 dishonoured due to insufficiency of funds in the account of the accused. Statutory notice issued intimating dishonour of the cheque and demanding the sum covered by the instrument was responded with a reply notice raising untenable contentions. The accused in the reply notice contended that he was a subscriber to a chitti conducted by the complainant and on prizing of chitti, the prize amount was given only after collecting a blank signed cheque and also a blank signed stamped paper as security for payment of future subscriptions to the chitti. Though he had paid the future subscriptions and the chitti had been terminated, the blank signed stamped paper and also the blank cheque were not returned, and misusing that cheque, it is his case, the complaint had been filed on false allegations. In the light of the reply as above, the complainant launched the prosecution against the accused for the prosecution under Section 138 of the N.I.Act. 3. The accused, on appearance, pleaded not guilty. Complainant examined himself as PW1 and got marked Exts.P1 to P6. During the course of the cross examination of CRL.A.242/02 3 the complainant as PW1, and also when questioned under Section 313 of the Cr.P.C., reiterating his plea of innocence, the accused pressed with the defence version already canvassed in his reply notice. To substantiate his defence, the accused examined one witness as DW1, who claimed to be present when the blank signed stamped paper and also blank cheque were obtained by the complainant from the accused. The accused also produced a document to show the collection of the blank signed stamped paper and blank cheque, and it was exhibited as Ext.D1. 4. The learned Magistrate, after appreciating the materials tendered in the case, came to the conclusion that the defence canvassed by the accused is probable and the complainant had not proved by cogent and convincing evidence that Ext.P1 cheque had been issued towards discharge of a debt or liability. In that view of the matter, the accused was found not guilty and he was acquitted of the offence imputed under Section 138 of the N.I.Act. CRL.A.242/02 4 4. I heard the counsel of both sides. The learned counsel for the complainant urged before me that the learned Magistrate misappreciated the evidence and it had resulted in forming wrong conclusion leading to miscarriage of justice. The complainant had established by the materials produced that Ext.D1 cheque was duly executed by the accused towards discharge of a debt and it was supported by other exhibits produced by the complainant in the case. The learned Magistrate, according to the counsel for the complainant, gave unmerited consideration to innocuous circumstances to hold that the defence canvassed by the accused is probable. The documents produced by the complainant to show that a blank signed stamped paper and also a blank cheque exhibited as Ext.D1 was found unreliable by the learned Magistrate. It was also found that the evidence tendered through the witness DW1, as to witnessing the transaction was also not credit worthy. The accused also did not mount the box to swear in support of his defence. Still the learned Magistrate, according to the learned counsel, found fault with the complainant for not proving the execution of Ext.P1 cheque and also the CRL.A.242/02 5 transaction under which that cheque was issued to have a successful prosecution of the accused for the offence indicated against him. Acquittal of the accused is based on erroneous reasonings, and as such, it is liable to be reversed, is the submission of the learned counsel for the complainant. On the other hand, the learned counsel for the accused submitted that even the admitted case of the complainant as to collecting a promissory note and retaining that negotiable instrument, while prosecuting the accused for the offence under Section 138 of the N.I.Act, lend credence to the defence canvassed by the accused that the cheque had been issued in blank form with signature alone as a security. When due execution of Ext.P1 cheque had not been established, it is submitted the case set up against the accused was rightly found against by the learned Magistrate, and at any rate in the proved facts and circumstances of the case, no interference with the acquittal is called for. 5. I have gone through the records of the case giving consideration to the submissions made by the counsel of both CRL.A.242/02 6 sides. It has to be noted that the definite case of the complainant right from inception, even from his notice intimating dishonour of the cheque is that he had advanced Rs.50,000/- to the accused collecting a promissory note from him and transaction, was agreed to be settled by repayment with 18% interest per annum. Later, when demand was made for repayment with the interest due, the accused issued a cheque for Rs.60,000/- and that cheque, when presented, was dishonoured, was his case. He had retained the promissory note, while prosecuting the accused on dishonour of the cheque, is taken serious exception by the learned Magistrate as a circumstance which affects the merit of his complaint. I do not find any merit in the reasoning so taken by the Magistrate where the complainant was candid enough to admit that the promissory note had been retained by him and the cheque had been issued towards discharge of the sum covered by the note. In evidence also he would state that he had handed over the promissory note and also the cheque to his counsel. At any rate, the accused has no case that any proceedings was taken for realisation of the sum covered by CRL.A.242/02 7 the promissory note separately. If at all the promissory note was retained by the complainant, when the cheque was handed over, the accused should have collected that instrument. The facts and circumstances would indicate that the promissory note was retained by the complainant perhaps, to assure the honouring of Ext.P1 cheque handed over by the accused. The interest agreed upon by the parties for repayment of the sum covered by the promissory note was 18% per annum. If a calculation was made, with such an interest, the sum would come to Rs.60,500/- on the date when the cheque was handed over was another reason which prompted the learned Magistrate to hold that the cheque might have been handed over in blank form. The reasoning of the Magistrate as indicated to say the list, deserves no merit at all. It is the specific case of the complainant that when the sum was demanded, the accused issued a cheque for Rs.60,000/-. The sum stated in the cheque did not reflect the interest due till that date, is not a ground to doubt the worth of that instrument. Other than the two circumstances, as referred to above, no other reason is stated by the learned CRL.A.242/02 8 Magistrate to doubt the case set up by the complainant. Both the reasonings, it has been found, is thoroughly unacceptable. Now the question to be considered is whether in view of the defence set up by the accused that the cheque had been issued in blank form with signature alone, the complainant is bound to prove the transaction and also that the instrument had been handed over duly executed with all the entries filled up. Merely by setting up a defence that the cheque was issued in blank form with signature alone, without anything more, no burden is cast upon the complainant to show that the instrument had been duly executed. If that be so, the presumption covered by Section 118 and also Section 139 of the N.I.Act would be rendered meaningless. If only the circumstances disclosed and materials produced indicate that the defence pleaded that the cheque had been issued in blank form with signature is probable, then alone the presumption under Section 139 can be considered as rebutted demanding proof from the complainant that the instrument had been issued towards discharge of a debt or liability. Even the Magistrate has found that whatever materials tendered by the CRL.A.242/02 9 accused to prove his defence, by examining DW1 and exhibiting D1, is of no avail and has no merit in advancing his defence. The evidence of the witness, DW1 was found totally unreliable. A carbon copy was exhibited as Ext.D1 to show that the complainant had acknowledged the receipt of a blank signed stamped paper and also a blank cheque. The learned Magistrate examining that document found that it is of no value, and further observed that prude man could be expected to execute such a document for collecting a blank signed cheque as security. After finding that the defence canvassed by the accused is not substantiated by any material, the case of the complainant was thrown out holding that the defence of the accused is probable. Not only in the materials produced by the accused there is nothing to show that his defence is probable, but, on the contrary, by his own evidence, it has been proved that his defence is unworthy of any value. Merely because, the complainant had retained the promissory note, which he was fair enough to concede right from the inception, even before launching the prosecution against the accused, his case cannot be doubted. Sworn testimony of the CRL.A.242/02 10 complainant, PW1, would convincingly show that Ext.P1 cheque had been issued by the accused towards discharge of a debt which he had with the complainant. It has also been established that the cheque was dishonoured due to insufficiency of funds in the account of the accused, and despite a notice of dishonour, the sum under the instrument was not discharged. In the proved facts of the case, in reversal of the judgment passed in favour of the accused, I find the accused guilty of the offence under Section 138 of the N.I.Act and convict him thereunder. 6. Now on the question of sentence, I find that incarceration of the accused for a term is not called for in the proved facts and circumstances of the case. The accused is sentenced to undergo till the rising of the court and to pay a compensation of Rs.55,000/- to the complainant under Section 357 (3) of the Cr.P.C. within two months. If compensation is not paid within the time fixed, the accused shall undergo simple imprisonment for a period of three months. The accused shall appear and his sureties to produce him on CRL.A.242/02 11 1st July, 2009, before the Judicial First Class Magistrate, Palakkad, and the learned Magistrate shall execute the sentence as directed. Appeal is allowed. S.S.SATHEESACHANDRAN JUDGE prp S.S.SATHEESACHANDRAN, J. -------------------------------------------------------- CRL.A.NO.242 OF 2002 (A) --------------------------------------------------------- J U D G M E N T --------------------------------------------------------- 27th March, 2009