IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS WEDNESDAY, THE 22ND DECEMBER 2010 / 1ST POUSHA 1932 CRL.A.No. 212 of 2004() ----------------------- AGAINST THE JUDGEMENT/ORDER IN CRLP.582/2003 Dated 02/12/2003 CC.1593/1998 of JUDL. MAGISTRATE OF FIRST CLASS-II(MOBILE), KOTTAYAM .................... APPELLANT(S): COMPLAINANT ------------------------- TOM JOSEPH, KALARIPARAMBIL HOUSE, THRIKODITHANAM, CHANGANASSERY, KOTTAYAM. BY ADV. SRI.M.J.THOMAS RESPONDENT(S): ACCUSED AND THE STATE ------------------------------------ 1. KURIAN JOSEPH, MATHICHIPARAMBIL MARKET ROAD, CHENGANASSERY, KOTTAYAM. 2. THE STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. ADV. SRI.SABU GEORGE FOR R1 R2 BY PUBLIC PROSECUTOR SHRI.MUHAMMED PUZHAKKARA THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 15/12/2010, THE COURT ON 22/12/2010 DELIVERED THE FOLLOWING: M.L. JOSEPH FRANCIS, J. - - - - - - - - - - - - - - - - - - - - - - - - - - Crl.A. No. 212 of 2004 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 22nd day of December, 2010 JUDGMENT This appeal is filed by the complainant in C.C.No. 1593 of 1998 on the file of the Addl. Magistrate of First Class No.II Mobile Court, Kottayam (Camp sitting Changanacherry). The first respondent herein was the accused in that case, which was filed by the complainant alleging commission of the offence under Section 138 of the N.I. Act. 2. Briefly the case of the complainant is as follows. Towards the amount due to the complainant, the accused issued Ext.P1 cheque. The complainant presented the above cheque for encashment, but the same was dishonoured due to insufficiency of funds. A registered lawyer notice was issued to the accused demanding payment of the amount. Though the notice was received by the accused, he did not repay the amount. Hence the complaint. Crl.A. No. 212 of 2004 2 3. In the Magistrate Court, on the side of the complainant, PW1 was examined and Exts.P1 to P7 were marked. On the defence side, Dws. 1 and 2 were examined and Exts.D1 to D5 were marked. The learned Magistrate, on considering the evidence, found that it is improbable that a huge amount of Rs.5,00,000/- was advanced by the complainant to the accused during the period in which money as per several other account were due to the complainant. On the other hand, the case set up buy the accused that he has secured the prize money of the chitty by executing blank signed cheques and promissory notes and one of the above cheque has been miutilised by the complainant to fabricate Ext.P1 document, appears to be correct. So it is found that the accused has miserably failed to establish that Ext.P1 cheque has been issued in discharge of a legally enforceable debt or liability. Hence the offence under Section 138 of the N.I. Act is not attracted in this case and the accused was found not guilty and acquitted under Crl.A. No. 212 of 2004 3 Section 255(1) Cr.P.C. Against that judgment of acquittal the complainant filed this appeal. 4. Heard learned counsel for the appellant and the learned counsel for the first respondent. 5. At the time of argument, learned counsel for the appellant raised the following contentions. The court below went wrong in acquitting the accused. The court below ought to have found that the essential ingredients of the offence under Section 138 of the N.I. Act is proved and the court below ought to have convicted the accused. The version given by PW1 is probable and natural. Simply because amounts are due from the accused to the complainant, the transaction spoken to by PW1 is not improbable and the finding of the court below is perverse. In the absence of any reliable evidence, the court below ought to have found that the cheque is issued for the discharge of a legally enforceable debt. The learned counsel for the first respondent supported the judgment of the court below. Crl.A. No. 212 of 2004 4 6. The accused contended that Ext.P1 cheque was not issued in discharge of any legally enforceable debt and it has been issued only by way of security. It was only a blank cheque with the signature of the accused. It is the definite case of the accused that the above cheque has been issued as security for the prize money of certain chitties conducted by the complainant, in which the accused was a subscriber. 7. The complainant was examined as PW1. He deposed that he had acquaintance with the accused and that the accused borrowed an amount of Rs. 5 lakhs from him and when he demanded back that amount, the accused issued Ext.P1 cheque. When PW1 presented that cheque for encashment, it was dishonoured due to insufficiency of funds in the account of the accused. Ext.P2 is the dishonour memo and Ext.P3 is the intimation memo. PW1 sent a lawyer notice to the accused, intimating the dishonour of the cheque and demanding the amount. PW1 deposed that inspite of receipt of the lawyer notice, the Crl.A. No. 212 of 2004 5 accused did not repay any amount. Ext.P4 is the copy of the lawyer notice and Ext.P5 is the postal acknowledgment. Ext.D3 is the copy of the reply notice sent by the accused. 8. The certified extract of the savings back account ledger of the accused is marked as Ext.P6. The cheque returned register maintained in the bank, in which the accused is having account, is marked as Ext.P7. From Exts.P6 and P7 it is clear that there was no sufficient funds in the account of the accused to honour Ext. P1 cheque. 9. In cross examination PW1 admitted that he is conducting a Kuri Company by name Kalariparambil Chitty Funds and Kuries and that the accused was a subscriber to two chitties for a total amount of Rs. 8 lakhs. PW1 deposed that the accused borrowed Rs. 5 lakhs in two intalments, Rs. 3 lakhs in Ocrtober, 1997 and Rs. 2 lakhs in December, 1997 and that he gave Rs. 5 lakhs not for getting interest. PW1 admitted that the accused remitted the entire amount due from him in the chittry transaction. PW1 denied the suggestion that he used Crl.A. No. 212 of 2004 6 to collect Promissory Notes and blank cheques while giving prized amount of the chitty. Instead he said that he used to insist to get salary certificate of Government servants and sale deeds as security. PW1 deposed that the accused signed Ext.P1 filled cheque in his presence. PW1 admits that on 23.3.1996 the accused and his brothers and parents borrowed Rs. 3 lakhs from him and for the realisation of that amount he filed a suit as O.S.No. 301 of 1998 before the Sub Court, Kottayam and that Ext.D2 is the copy of the plaint in that suit. 10. The accused was examined as DW1. According to DW1 when he bid the chitty conducted by the complainant, he gave blank signed cheques as security and that the complainant misused one such cheque and filed the above complaint. The counter foil of the cheque book maintained by the accused is marked as Ext.D4. Ext.P1 cheque is also seen issued from the above counter foil book. It was submitted by the learned counsel for the accused that the last cheque leaf bearing No.745240 in Ext.D4 counter foil came up for collection before Ext.P1 Crl.A. No. 212 of 2004 7 cheque bearing No.755230. The Manager of the Bank was examined as DW2. From his evidence it is clear that the cheque usually does not come for collection in the chronological order or as per serial number. The certified copy of the savings bank account ledger of the accused was marked as Ext.D5. DW2 deposed that two cheque leaves came up for collection. Hence the fact that Ext.P1 cheque came up for collection subsequently is not of much significance. 11. It has come out in evidence that the complainant is conducting chitty business and also engaged in lending money and the accused and his family borrowed amounts from him. The mere fact that a huge amount was due from the accused by way of chitty transaction and a civil suit was pending against the accused for recovery of the amount are not sufficient to doubt the case of the complainant that he lent Rs. 5 lakhs to the accused and when he demanded back that amount the accused issued Ext.P1 cheque as in those transactions the complainant obtained sufficient security for Crl.A. No. 212 of 2004 8 realisation of those amounts and that the accused was paying the amounts due in the chitty transaction promptly. If Ext.P1 cheque was given by the accused as security for the chitty transaction, the accused ought to have taken steps to get back that cheque after closing the chitty transaction. But the accused has not taken any steps for getting back the cheque. On considering all these aspects, I am of the view that the case of the complainant that Ext.P1 cheque was issued by the accused is believable. Since execution of Ext.P1 cheque is proved, the presumption under Sections 118 and 139 of the Act would apply and it is for the accused to rebut that presumption. But the evidence adduced from the side of the accused is not sufficient to rebut that presumption. 12. Since the complainant has proved all the essential elements of the offence under Section 138 of the N.I. Act, the learned Magistrate is not justified in acquitting the accused. As the accused Crl.A. No. 212 of 2004 9 committed the offence under Section 138 of the Act he is convicted for that offence. 13. In the decision reported in Damodar S. Prabhu v. Sayed Babalal H (2010(2) KHC 428 (SC)), it was held that in a case of dishonour of cheques, compensatory aspect of the remedy should be given priority over the punitive aspect. Considering the facts and circumstances of the case, I am of the view that sentencing the accused to pay a fine of Rs.5,00,000/- would meet the ends of justice. 14. Accordingly this appeal is allowed. The judgment of acquittal in C.C.No. 1593 of 1998 on the file of the Addl. Magistrate of Ist Class - No.II, Mobile Court, Kottayam (Camp sitting Changanacherry) is set aside and the accused is found guilty and convicted under Section 138 of the N.I. Act and he is sentenced to pay a fine of Rs.5,00,000/- The said fine shall be Crl.A. No. 212 of 2004 10 paid to the appellant as compensation under Section 357(1) of Cr.P.C. The accused is permitted either to deposit the fine amount before the court below or directly pay the compensation to the appellant within three months from today and produce a memo to that effect before the court below in case of direct payment. If the accused fails to deposit or pay the said amount within the aforesaid period, he shall suffer S.I. for a period of three months by way of default sentence. (M.L. JOSEPH FRANCIS) Judge tm