IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN TUESDAY, THE 24TH NOVEMBER 2009 / 3RD AGRAHAYANA 1931 Crl.Rev.Pet.No. 2346 of 2009(C) -------------------------------------------- CRL.A.NO.192/2004 OF ADDL. SESSIONS COURT (ADHOC-I), KOLLAM, CC.NO.86/2000 OF JUDL.MAGISTRATE OF FIRST CLASS-II, KOTTARAKKARA. .................... PETITIONERS/APPELLANT/ACCUSED: --------------------- -------------------------------- 1. SWATHI CHITHRA CULTURAL AND FILM SOCIETY, SEA HOSTAL, PALAYAM, TRIVANDRUM. 2. R.P.CHANDREN, SECRETARY, SWATHI CHITHRA CULTURAL & FILM SOCIETY, SEA HOSTAL, PALAYAM, TRIVANDRUM. BY ADV. SMT.SHERLY M. THOMAS. COMPLAINANT/3RD ACCUSED/STATE/: --------------------------------------------------------- 1. DR.SATHEESAN, S/O.SARNGADHARAN, SREE KRISHNA VILASAM, CHITHARA VILLAGE, KADAKKAL, KOLLAM DISTRICT. 2. THE PRESIDENT, SWATHI CHITHRA CULTURAL & FILM SOCIETY, SEA HOSTAL, PALAYAM, TRIVANDRUM. 3. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. R1 BY ADV. MR.B.MOHANLAL, R3 BY PUBLIC PROSECUTOR MR. JAYAKRISHNAN. THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 24/11/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: prv. P.S. GOPINATHAN, J. ------------------------------- Crl.R.P.No.2346 of 2009 ---------------------------------------- Dated this the 24th day of November 2009 O R D E R The revision petitioners are accused 1 and 2 in C.C.No.86/2000 on the file of the Judicial Magistrate of the First Class II, Kottarakkara. The first respondent herein is the complainant before the lower court. The first respondent prosecuted the revision petitioners along with the second respondent (3rd accused) alleging offence Under section 138 of Negotiable Instrument Act with a pleading that the 2nd and 3rd accused were responsible for the conduct of the business of the first accused Society and that they were familiar to the first respondent and were friends and that for the running of the business of the first revision petitioner, the second revision petitioner along with the second respondent borrowed a sum of Rs.75,000/- on 10.5.1998 and when demanded back the amount on various occasions, second revision petitioner and the second respondent gave a cheque for the said amount drawn on Thiruvananthapuram Service Co-operative Bank. When the C.R.R.P.No.2346/2009 2 cheque was sent for collection it was returned dishonoured for insufficiency of funds and that demanding discharge of the liability, a lawyer notice was caused. Notice was returned by the second respondent. Though revision petitioners acknowledged the same, the liability was not discharged. 2. The learned Magistrate took cognizance and issued process responding to which, the three accused appeared before the learned Magistrate. When particulars of the offence were read over and explained, they pleaded not guilty. Hence they were sent for trial. On the side of the first respondent, he was examined as PW1 and Ext.P1 to P8 were marked. In the complaint there is no mention as to who would represent the first revision petitioner. The learned counsel for the revision petitioners submitted that the first revision petitioner was represented by the second revision petitioner. However, the first revision petitioner was not seen questioned under section 313 Code of Civil Procedure. Second revision petitioner admitted that he was the Secretary of the first revision petitioner and stated that the first respondent was the President during that period and that in April 1996 the first respondent produced C.R.R.P.No.2346/2009 3 four episodes of a tele film by name 'Deeptham' for an on behalf of the first revision petitioner and about Rs.2,70,000/- were spent, out of which it was alleged that the first respondent had spent about Rs.75,000/-. The first respondent insisted for an agreement and a cheque by stating that at a time when the first respondent would cease to be the president there would not be any document for the amount spent by him. Accordingly the cheque was got from the second revision petitioner along with the agreement that the cheque would not be presented for collection and that the film could not be telecasted so far and that it was the understanding that the amount would be paid only after telecasting the film. Since the 3rd accused had not come before this court with revision, I am not mentioning about the statement of the 3rd accused. Second revision petitioner and another were examined as DW1 and 2. Ext.D1 to D6 were marked. On appraisal of the evidence, the learned magistrate arrived a conclusion that the accused are guilty for offence under section 138 of Negotiable Instrument Act. Though the first revision petitioner/first accused was found guilty the first accused was not convicted, but the first accused was directed to pay a sum of Rs.75,000/- to the first respondent u/s.357(3) of the Code of Criminal Procedure. C.R.R.P.No.2346/2009 4 3. Assailing the above conviction and sentence all the accused preferred Crl. appeal No.192/2004. The Additional Sessions Judge (Adhoc)1, Kollam, to whom the appeal was made over, by judgment dated13.1.2009 dismissed the appeal. Assailing the legality, correctness and propriety of the above conviction and sentence as confirmed in appeal, accused 1 and 2 had now preferred the revision petition. 4. The first respondent, who was examined as PW1 had deposed that the second and third accused were the Secretary and President of the first accused society and that the 2nd and 3rd accused had been running the affairs of the first accused and that on 10.5.1998 the second accused/second revision petitioner borrowed a sum of Rs.75,000/- for the working of the first accused Society and that the said amount was not paid back, and after repeated requests, on 5.7.1998 the second and third accused went to the first respondent and issued Ext.P1 cheque dated 15.7.1998 drawn on Service Co-operative Bank, Thiruvananthapuram and that when Ext.P1 was sent for collection, it was returned dishonoured for insufficient funds along with Ext.P2 memo and Ext.P4 intimation slip. It was C.R.R.P.No.2346/2009 5 further deposed that on 28.12.1998, a notice demanding discharge of liability was caused. It was acknowledged by first and second accused and that the 3rd accused refused the notice and it was returned unclaimed. Ext.P6 is the copy of the notice. Ext.P5 series are the postal receipts. Ext.P7 series are the acknowledgment cards signed by accused 1 and 2 and Ext.P8 is the unclaimed notice. 5. It is the common case of the parties that first revision petitioner is a registered Society. It is not at all disclosed either in the pleadings or in the evidence under which statute the first revision petitioner was registered. Neither any evidence was let into as to who are competent to represent the Society in legal proceedings. In cross examination, PW1 had deposed that he was elected as the president of the first revision petitioner society in the year 1996-1997 for a period of five years. But, he orally resigned the post of the President. On the other hand, the second revision petitioner as DW1 had deposed that the first respondent was the president of the society during the period of 1996-2002. What was the provision for resignation from the post of President once elected and assumed office is also not disclosed in evidence. Bye-law of the Society was also not C.R.R.P.No.2346/2009 6 produced. In the event no oral resignation is permissible, in the eye of law, the first respondent would be the president of the society and he would have been the 3rd accused. If the president is the person to represent the 1st revision petitioner in the legal proceedings and there is no valid resignation by the 1st respondent from the office of the President, the launching of the prosecution by the 1st respondent against the 1st revision petitioner is not sustainable. In the complaint the name of the 3rd accused is not mentioned, whereas it is vaguely stated as president, Swathichithra Cultural Film Society. Whatever may be that, in the evidence of PW1, there is no mention that the loan was availed for and on behalf of the first revision petitioner. What PW1 had deposed is that the second revision petitioner had borrowed an amount for the running of the society. How such borrowal by the second revision petitioner would bind upon the first revision petitioner or its assets or members of the society is not brought out in evidence. In the event a loan is to be availed for an on behalf of the Society, the executive committee if any had to take a decision and authorise an officer of its choice to execute document and to avail loan. Or else, if any person avails a loan stating to be for and on behalf of the Society, it may not bind upon upon the society so long as there is no authorisation C.R.R.P.No.2346/2009 7 by the society, So there is material lacking to come to a conclusion that the first respondent owed a debt or a legally recoverable liability to the first respondent 6. A perusal of Ext.P1 cheque would show that it was signed by the President and Secretary. According to the learned counsel for the first respondent, one Thankachan Kurisinkal was the Acting President of the Society and he had the authority to act for and on behalf of the President and in that capacity Ext.P1 was signed by him along with the second revision petitioner. A reading of the complaint would show that there is no such pleading as I mentioned earlier. There is nothing pleaded to the effect that so called Thankachan Kurisinkal was the working president of the Society or that he was competent to sign the cheque for an on behalf of the President. Since there is no material brought out in evidence to show that first respondent who was elected as the President of the society, demitted the office of the President by resignation or otherwise as prescribed by the bye-laws, he ought have been the signatory in Ext.P1 cheque. If the office bearers are to be elected, so long as there is no evidence regarding the election and assumption of office by the second respondent, he would not get any right to sign the C.R.R.P.No.2346/2009 8 cheque on behalf of the society. In the absence of evidence regarding the election of any person other than the first respondent as president of the first revision petitioner Society, the cheque signed by the so called acting President is not binding upon the Society. It is not disputed that to constitute an offence under section 138 of Negotiable Instrument Act, the cheque shall be drawn on an account maintained by the signatories. In the event the working president was not competent to operate the account, the execution of the cheque by the working president would not bind upon the first revision petitioner. 7. It appears that the second and third respondents were prosecuted in the light of provision contained in section 141 of the Negotiable Instrument Act read with the explanation thereunder. As I mentioned earlier, other than the vague statement in the complaint that the second and third accused were responsible for the running of the first accused, there is no evidence as to who are competent to represent the first accused Society. There is no material to conclude that 2nd and 3rd respondents are competent to sign the cheque. If it was the president to sign the cheque, it should have been signed by the C.R.R.P.No.2346/2009 9 President, who is the 1st respondent, and not by Thankachan Kurisinkal. In this view of the matter, the evidence on the side of the first respondent is not sufficient enough to conclude that there is a legally enforceable debt or liability as against the first revision petitioner in favour of the first respondent. There is also no evidence to come to a conclusion that the signatory as President of the first revision petitioner society is competent to represent the society. In the absence of evidence regarding liability in discharge of which cheque was delivered by persons competent to sign, neither the society nor the secretary, who is the 2nd revision petitioner is liable to be prosecuted. I find that the courts below had not correctly appreciated the evidence. The conclusion of guilty, consequential conviction and sentence against 2nd and 3rd accused are not at all sustainable. 8. According to the revision petitioners, first revision petitioner society ventured to produce the tele film 'Geetham'. The first respondent was the director of the said film. For the production of the film, the first respondent had spent some amount and he had obtained a cheque from the second revision petitioner. The first respondent had been insisting for a cheque for and on behalf of the first revision petitioner Society and C.R.R.P.No.2346/2009 10 accordingly the matter was placed before the executive committee and committee by its resolution dated 17.1.1998, as evidenced by Ext.D6, Minutes resolved to issue a cheque for Rs.75,000/- in favour of the first respondent and to get back the cheque issued by the second revision petitioner in his personal capacity. It was also resolved that before issuing the cheque a consent letter should have been obtained to the effect that the cheque would not be sent for collection unless the tele film produced was telecasted. If regard is given to that evidence, the cheque was not issued in discharge of liability. The cross examination of PW1 would show that there was some transaction regarding the production of the tele film and he had spent some amount. It was also admitted that a cheque was issued for the amount spent by him. He had also admitted that an agreement was executed but the same was not produced despite the order issued by the learned Magistrate on a petition filed by the second revision petitioner for the production of the document. In cross examination PW1 deposed that there is no hindrance for producing the document but he did not comply with the order of the Magistrate though the document is with him. These circumstances would show that there was some transaction in between the revision petitioners and the first respondent. The C.R.R.P.No.2346/2009 11 contention of the revision petitioners that Ext.P1, cheque was issued as a security cannot be ruled out especially when it is established by the resolution of the executive committee. In this view of the matter also no offence u/s.138 of Negotiable Instrument Act would be established. I find that the conviction and sentence under challenge are not sustainable and liable to be set aside. In the result, the revision petition is allowed. While setting aside the conviction and sentence under challenge, the revision petitioners are acquitted and set at liberty. The bail bond executed by them shall stand cancelled. (P.S. GOPINATHAN, JUDGE) sou