IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE A.K.BASHEER FRIDAY, THE 23RD MAY 2008 / 2ND JYAISHTA 1930 CRL.A.No. 471 of 2001 ------------------------------- CC.1018/1998 of JUDL. MAGISTRATE OF FIRST CLASS-I, KOZHIKODE .................... APPELLANT/COMPLAINANT: ---------------------------------------- R. JAYANTHI MENON, D/O.U.G.MENON, ETISALAT, SWITCHING PROJECTS (H.O), P.B.NO.1150, DUBAI, UNITED ARAB EMIRATES. BY ADV. SRI.SUNNY MATHEW RESPONDENTS/ACCUSED & STATE:: --------------------------------------------------- 1. P.BALASUBRAMANIAN, DIRECTOR, METRO HABITATS PVT. LTD., RESIDING AT 84-F, 4TH CROSS, NEW TIPPASANDRA, HAL III STAGE, BANGALORE - 580 038. 2. STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. PUBLIC PROSECUTOR SRI.SALIM. THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 23/05/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: A.K. Basheer, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - Crl.A. No. 471 of 2001 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 23rd day of May, 2008 JUDGMENT Appellant is the complainant in a prosecution under section 138 of the Negotiable Instruments Act. She had prosecuted respondent No.1 herein alleging that Exts.P3 and P4 cheques issued in her favour had been dishonoured when presented for encashment. Liability was not discharged by respondent No.1/accused even after receipt of the statutory demand notice. 2. The learned Magistrate after scrutiny of the oral and documentary evidence on record held that Pw.1 the Power of Attorney Holder had no authority to prosecute or take any illegal action against respondent No.1/accused. It was also held that Exts.P3 and P4 cheques had not been issued towards discharge of any legally recoverable debt or liability. But the learned Magistrate found that the accused had been served with the statutory demand notice and that he had failed to pay off the liability even after receipt of the demand notice. But ultimately the learned Magistrate found the accused not guilty and acquitted him for the reasons stated in the earlier part of this paragraph. The said order of acquittal is under challenge in this appeal. 3. The case of the complainant was that the accused had represented to the complainant that he was the Chairman and Managing Director of M/s. Metro Habitat Pvt. Ltd., Bangalore and that he was the promoter of several housing apartments and building complexes. He informed the complainant that an apartment complex was being constructed in Bangalore and assured to allot one such flat/apartment Crl.A.471/2001 2 to the complainant. Accordingly the complainant had paid a sum of Rs.6,30,000/- to the accused as advance for allotment of one such flat in Bangalore in the building complex that was to be constructed by the accused. The receipt of the said amount was acknowledged by the accused. But since no steps were taken by the accused to construct the building, the complainant demanded return of the money paid by her to the accused. Accordingly the accused had issued two cheques dated August 10, 1998, one of which was for Rs.6,30,000/- being the amount advanced by the complainant to the accused and the other for a sum of Rs.75,600/- being the interest payable on the said amount. When the said two cheques (Exts.P3 and P4) were presented for encashment, they were dishonoured since payment had been stopped at the instance of the complainant. Though the statutory demand notice was received by the complainant, he failed to repay the amount. Hence the complaint. 4. As noticed already, the Power of Attorney holder was examined as Pw.1 . The Manager of the Bank was examined as Pw.2. Exts.P1 to P12 were marked on the side of the complainant. There was no oral or documentary evidence on the side of the accused. 5. Ext.P1 is stated to be the Power of Attorney executed by the complainant in favour of Pw.1. In the said document, the accused was described as P.Balasubramanian, Chairman, Metro Lubricants, No.10 Main Road, 8th cross, L.B.Shastri Nagar, Vimanapura.P.O., Bangalore 17. But in the complaint the case of the complainant was that the Crl.A.471/2001 3 accused had introduced himself as the Chairman and Managing Director of Metro Habitat Pvt. Ltd., Bangalore. The accused was described in the complaint in that capacity. The learned Magistrate took the view that the complainant had authorised Pw.1 to launch the prosecution against a totally different person other than the accused and therefore the prosecution launched against the accused under Section 138 of the Act through Pw.1 was incompetent. I am afraid the above finding entered by the learned Magistrate is wholly unsustainable. 6. The specific case of the complainant was that the accused had informer her that he was the Chairman and Managing Director of Metro Habitat Pvt. Ltd. The further case of the complainant was that the accused had issued the two cheques in such capacity. Significantly the accused did not dispute his signature in the two cheques. He had in fact allegedly stopped payment of the two cheques. Pw.2 the Manager of the Bank had deposed before the court that on the day when the two cheques were presented for encashment, there was no sufficient fund in the account of the accused to honour the two cheques. More importantly, when Pw.1 was cross examined on behalf of the accused, there was not even a suggestion that Exts.P3 and P4 cheques were not issued by the accused in favour of the complainant. On the contrary, it had been admitted by the accused in his Section 313 statement that Ext.P2 series receipts were issued by him at the time when the complainant had paid Rs.6,30,000/- to him. He had also admitted that he was the Chairman and Managing Director of Metro Habitats. The Crl.A.471/2001 4 accused did not have a case that there was any other transaction between him and the complainant and it was in connection with the said transaction that he had issued Exts.P3 and P4 cheques to the complainant. 7. It may also be noticed that the accused and father-in-law of the complainant were first cousins as admitted by the accused himself. It may also be noticed that the accused had not bothered to send a reply to the statutory notice issued on behalf of the complainant when the cheques were dishonoured. In short, the entire facts and circumstances of the case, as brought out in evidence, will undoubtedly show that the accused had no case that he had not issued Exts.P3 and P4 cheques to the complainant or that he had had no transaction of any kind with the complainant. He had not denied the case of the complainant that the accused had managed to get the sum of Rs.6,30,000/- from her on the assurance and promise that a flat would be allotted in her favour in the complex to be constructed by the accused in Bangalore. 8. The accused had not adduced any evidence on his side. He had totally failed to discharge the burden cast on him under Section 139 of the Act. But the evidence adduced by the complainant through Pws.1 and 2, supported by the documents clearly and clinchingly established that the complainant had succeeded in proving her case. 9. It is also pertinent to note that in the course of cross- examination, a question was put to Pw.1 as to whether he had not received a sum of Rs.2 lakhs from the accused to be adjusted towards Crl.A.471/2001 5 the liability. Pw.1 had answered in the affirmative. It also shows that there existed a creditor-debtor relationship between the complainant and the accused and that the case set up by the complainant in the complaint was entirely probable. In that view of the matter also, the learned Magistrate, in my view, was not at all justified in denying relief to the complainant on the specious ground that the person mentioned in Ext.P1 Power of Attorney was not the accused , since he was described in a different capacity. 10. The learned Magistrate had held that Exts.P3 and P4 cheques were not issued towards discharge of any legally enforceable debt or liability since the Company in question viz., M/s. Metro Habitat Pvt. Ltd., had not been impleaded in the complaint. This finding of the learned Magistrate is also wholly untenable, since the accused had not even raised such a contention in the course of the trial. 11. As mentioned earlier, the accused did not have a case that he had not issued the two cheques in question. The specific case of the complainant that the accused had issued Exts.P3 and P4 cheques in discharge of a legally enforceable debt had not been specifically denied or disputed by the accused. Therefore, in my view, the learned Magistrate was not justified in holding that Exts.P3 and P4 were not issued in discharge of any legally enforceable debt. The presumption available under Section 118 of the Act was also in favour of the complainant. 12. The court below had nevertheless found that the accused had Crl.A.471/2001 6 failed to discharge the debt even after receipt of the statutory demand notice. It was also held that Exts.P3 and P4 cheques were dishonoured due to insufficiency of funds in the account of the accused. For this purpose, the evidence of Pw.2 the Manager of the Bank was relied on by the learned Magistrate. 13. After carefully considering and evaluating the entire materials available on record I am satisfied that the learned Magistrate was not justified in holding the accused not guilty. Therefore the finding of not guilty entered by the learned Magistrate is set aside. The case is remitted back to the court below with a direction to pass appropriate orders on sentence after hearing the accused and the complainant. The court below shall dispose of the case in terms of the above direction as expeditiously as possible, at any rate within three months from the date of receipt of a copy of this judgment. A.K. Basheer Judge. an.