IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN TUESDAY, THE 24TH MARCH 2009 / 3RD CHAITHRA 1931 CRL.A.No. 26 of 2002() ---------------------- CC.973/1996 of JUDL.MAGISTRATE OF FIRST CLASS COURT, PAYYANNUR .................... APPELLANT(S): COMPLAINANT: ------------------------------------------------ T.M.ALIYAR RAVUTHAR, S/O. MOIDEEN RAVUTHAR, THATTAPARAMBIL HOUSE, PRAPOIL P.O., KANNUR DISTRICT. BY ADV. MR.O.V.MANIPRASAD RESPONDENT(S): ACCUSED: --------------------------------------------- M.P.MOIDEEN, MOOLAKKAL PUTHIYAPURAYIL HOUSE, POKKUNDU, KURUMATHUR P.O., THALIIPARAMBU (VIA), KANNUR DISTRICT. BY ADV. MR.M.SASINDRAN THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 24/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss S.S.SATHEESACHANDRAN, J. ------------------------------- CRL.APPEAL.NO.26 OF 2002 (A) ----------------------------------- Dated this the 24th day of March, 2009 O R D E R The appeal is filed by the complainant, whose complaint under Section 138 of the Negotiable Instruments Act, in short, the 'N.I.Act', against the respondent, after trial, ended in a judgment of acquittal. Questioning the legality, propriety and correctness of that acquittal, he has preferred this appeal. 2. The case of the complainant is that, towards a debt arising from a loan transaction, the accused issued Ext.P1 cheque for a sum of Rs.80,000/-, promising its encashment on presentation in due course. The cheque presented was, however, dishonoured due to insufficiency of funds in the account of the accused. Statutory notice issued intimating dishonour and demanding the sum covered by the instrument, was returned unclaimed. Complainant, thereupon, launched the prosecution against the accused under Section 138 of the CRL.A.26/02 2 N.I.Act. The accused pleaded not guilty. Complainant examined himself as PW1 and got marked Exts.P1 to P5 to prove his case. The accused, during the cross examination of the complainant, set up a defence that the cheque had been issued as a security in respect of a transaction relating to the issue of a visa for the son-in-law of the complainant; through his travel agency. After obtaining the visa, the son-in-law of the complainant did not make use of it. Money paid for obtaining the visa was demanded back from the accused, which gave rise to a police complaint and also a dharna at his residence. Pursuant to intervention of the police, he had issued the cheque as security and, later, substantial amount agreed to be paid under the transaction relating to the visa, was also paid to the complainant. When questioned under Section 313 of the Cr.P.C., the plea of defence as stated above was reiterated and in support of that case, he examined two witnesses as DWs.1 and 2 and got exhibited D1. The learned Magistrate, after appreciating the materials tendered in the case, came to the view that the complainant had not proved his case that there was a loan transaction with the accused as CRL.A.26/02 3 alleged in his complaint, and, the accused had rebutted the presumption arising under Section 139 of the N.I.Act. On the materials tendered in the case, the learned Magistrate was of the view that in order to sustain the prosecution against the accused, the complainant was bound to prove the loan transaction leading to the issue of Ext.P1 cheque alleged in his complaint. Concluding that the complainant did not establish his case with convincing evidence, and the defence case was probable the accused was acquitted. The legality and correctness of that decision is impeached in the appeal. 3. I heard the counsel of both sides. The materials produced and circumstances presented in the case indicating that the cheque had been issued by the accused in discharge of a debt/liability to the complainant, which is even admitted by the defence, according to the learned counsel for the complainant, was lost sight by the court below and that had resulted in forming a wrong conclusion resulting in manifestation of injustice. Version of the complainant as to the circumstance that Ext.P1 cheque was handed over by the CRL.A.26/02 4 accused, in the absence of rebuttal evidence sufficient enough to discard the statutory presumption, should have received acceptance, submits the counsel. Inviting my attention to the suggestive questions put to the complainant, the learned counsel for the complainant submitted that according to the accused, what ever part payment made to the complainant had been made only after collecting documents/receipts; but, not even a single document evidencing any payment was produced. An admission made by the complainant that he had received Rs.15,000/- at the station, which according to him, was in connection with a different transaction, was given unmerited consideration by the learned Magistrate, to hold that whatever statutory presumption available in his favour had been rebutted, submits the counsel. There is no concrete evidence to show that the sum of Rs.15,000/-, which is admitted as collected, had been received by the complainant after the execution and handing over of Ext.P1 cheque. The learned counsel for the complainant relied on Kumar Exports v. Sharma Carpets ((2009) 2 SCC 513) to contend that the learned Magistrate went wrong in insisting CRL.A.26/02 5 proof of the transaction relating to Ext.P1 cheque, when special rules of evidence relating to presumptions are applicable to the case. On the proved facts and circumstances involved in the present case, it is submitted that the acquittal passed in favour of the accused based on misappreciation of the evidence, deserves to be interfered with and a conviction has to be founded against him for the offence under Section 138 of the N.I.Act. The learned counsel appearing for the accused supported the judgment of acquittal passed by the learned Magistrate contending that the facts and circumstances as established by the materials produced in the case would unerringly show that the case of the complainant that he had a loan transaction with the accused leading to the issue of Ext.P1 cheque was thorougly unbelievable. The defence case pleaded by the accused to some extent is practically conceded by the complainant when he was subjected to cross examination, submits the counsel. The complainant, examined as PW1, had initially contended that he had no transaction with the accused other than the one covered by Ext.P1 cheque, but, later in the heat of cross CRL.A.26/02 6 examination admitting that he had received Rs.15,000/- from the accused, he gave an explanation that it was in respect of a different transaction. The complainant had no consistent case as borne out by the contradiction so brought out in his evidence, is the submission of the counsel. The complainant had earlier filed a civil case on the cheque, but it was dismissed for non payment of court fee. That dismissal has become final is also banked upon by the counsel as a pertinent circumstance discrediting the case of the complainant. Complainant, in his evidence as PW1, had admitted of receiving a sum of Rs.15,000/- from the accused, and which, according to the counsel, amounted to a part payment of the sum covered by the cheque. Relying on Joseph Sartho v. Gopinathan Nair (2008 (4) KLT 509), the learned counsel for the accused submitted that when part payment of sum covered by the cheque had been received, a prosecution, on the basis of the cheque dishonoured cannot be entertained, and on that solitary ground itself the complaint must fail. Savings bank account of the complainant, at the relevant time, did not show a balance of Rs.80,000/-, as evidenced by the CRL.A.26/02 7 extract of that account brought in as Ext.D1 in evidence is also relied upon by the counsel to contend that the case of the complainant that he had advanced Rs.80,000/- to the accused cannot be believed for a moment. The learned Magistrate, on the basis of the materials produced by both sides in the case, has rightly and correctly held that the statutory presumption under Section 139 of the N.I.Act had been rebutted; and, in the absence of cogent proof regarding the loan transaction alleged by the complainant, which is lacking in the case, his complaint must fail, submits the counsel. In order to rebut the presumption under Section 139 of the N.I.Act, the accused need not examine himself, submits the counsel relying on Krishna Janardhan Bhat v. Dattatraya G. Hegde (2008 (1) KHC 410 (SC)), contending that he may discharge that burden on the basis of the materials available. So, according to the learned counsel, no interference with the judgment of acquittal is called for. 4. I have examined the materials of the case, giving consideration to the submissions made by the counsel of both CRL.A.26/02 8 sides. First and foremost, the appreciation of evidence in the case by the learned Magistrate, as disclosed by the judgment, appears to be erroneous. The learned Magistrate had proceeded with an enquiry, whether the accused had borrowed Rs.80,000/- from the complainant and issued Ext.P1 cheque to discharge that debt. Ext.P1 cheque was issued as a security in connection with a different transaction was the plea canvassed by the accused. He had no case when PW1 was cross examined that the cheque was issued in blank form with his signature alone though he had developed such a case when questioned under Section 313 of Cr.P.C. During the examination of PW1, what was suggested was that in respect of a different transaction relating to the obtaining of a visa for the son-in-law of the complainant, some dispute arose between the parties and pursuant to police complaint, it was settled at the police station. When such a settlement was effected, he issued a cheque as security was his version. When such a defence had been set up to a prosecution arising from a complaint under Section 138 of the N.I.Act, naturally, one would expect the accused to lead evidence and marshal CRL.A.26/02 9 circumstances establishing that the transaction giving rise to the issue of the cheque had taken place as contended. Merely because the accused had contended that the cheque was issued in 'blank form' with his signature alone, which was his later case, it does not presuppose that it has to be accepted as gospel truth. The totality of the circumstances has to be viewed to examine whether in the nature of defence so set up, the complainant has to prove due execution of the cheque. In that context, the statutory notice issued on dishonour of the cheque and the refusal to accept that notice, which was returned unclaimed, assumes much significance. The accused has not established by any material that notice issued in his address was returned on account of some fraud played by the complainant. Returning of the notice as 'unclaimed', indicated due service of the notice, as there was improper refusal on the part of the accused to accept that notice. Admittedly, the cheque arose from an account maintained by the accused and it was dishonoured due to insufficiency of funds in his account. Coupled with these circumstances, the sworn testimony of the complainant that a duly executed cheque was handed over by CRL.A.26/02 10 the accused to discharge the debt or liability has to be appreciated. When complainant examined as PW1 was subjected to cross examination, it has been brought out that in respect of a transaction, he had collected a sum of Rs.15,000/- from the accused. But it has not been established that such payment was made after handing over of the Ext.P1 cheque to the complainant. True, the complainant as PW1 had stated that he had no transaction with the accused other than the one covered by the cheque. That version was shown incorrect when he admitted of receiving Rs.15,000/- at the station in respect of a different transaction. But the crucial question is whether he had received such sum after the issue of Ext.P1 cheque and as part of the sum covered under that instrument. Even the accused has no such case, nor even a suggestion to the complainant that the sum of Rs.15,000/- was paid after the issue of the cheque. So much so, the discrepancy or even contradiction in the evidence of PW1 as to the collection of Rs.15,000/- from the accused does not have any significance. 5. PW1 is a retired teacher and it is his case that the CRL.A.26/02 11 monetary benefits obtained by him after his retirement was handed over to the accused as a loan. His case was that in discharge of the loan the accused issued Ext.P1 cheque. Even assuming that the cheque had been issued in respect of a transaction relating to the issue of a visa, as contended by the accused, where the proved facts prima facie show that the cheque had been issued towards discharge of a debt or liability, and it had been dishonoured on account of insufficiency of funds in the account of the accused, he cannot escape from the penal consequences on such dishonour. I do not find any merit in the submission made by the learned counsel for the accused relating to the dismissal of the civil case filed to claim the amount under the cheque, as it has no bearing on the prosecution launched on dishonour of the cheque. Penal provisions have been brought in the Act in addition to the civil remedies available for realisation of the sum covered by the negotiable instrument. Dismissal of the civil case for nonpayment of the court fee and otherwise than on merit, only indicate a case of non prosecution of a civil remedy available under the negotiable instrument. So far as CRL.A.26/02 12 the case of part payment made by the accused, the suggestive questions made to the complainant, when examined as PW1, and the answers elicited from him are relied to contend that such payment had been made towards the sum covered by the cheque. Not even a single suggestion had been made to PW1 when he was in the box that any payment was made after issuing of the cheque, which according to the accused was given as a security. Admission of the complainant that he had received Rs.15,000/- at the station is not sufficient to prove that it was received as part payment of the sum covered by the cheque, after that instrument was handed over. Further more, the suggestive questions put by the accused would show that part payment had been made after collecting documents or receipts acknowledging payment. If at all, such part payments had been made on collecting receipts, nothing prevented the accused from producing those documents before the court. Production of Ext.D1, the extract of the savings bank account of the complainant to advance the case that the complainant at no point of time, had a sum of Rs.80,000/- in his account, and so much so, his case of advancing of Rs.80,000/- has to be CRL.A.26/02 13 disbelieved, deserves to be noted in the backdrop of the defence canvassed by the accused, when questioned under Section 313 of the Cr.P.C. The maximum balance in the account of the complainant during the relevant period as per Ext.D1 was only Rs.60,000/-. But the accused has admitted, as seen from his statement made when questioned under Section 313 of the Cr.P.C., the sum of Rs.70,000/- was received from the complainant to give a visa to his son-in-law. So the capacity of the complainant to raise sums in excess of the amount shown in his savings bank account is not disputed, but, admitted by the accused. So, the primary question that required consideration under the facts presented in the case was whether the accused had rebutted the presumption under Section 139 of the N.I.Act demanding the complainant to prove that the cheque had been issued towards discharge of a debt. On the facts in the case, even on the admissions made by the accused, the cheque is supported by consideration. To prove the plea of discharge, as to the extent of the part payment made, no material was placed before the court. Admissions made by the accused, as under the defence case CRL.A.26/02 14 canvassed, would show that the cheque had been issued towards a debt or liability and it was supported by consideration, whether it be in respect of a loan transaction or in obtaining of a visa. No burden was cast upon the complainant in the given facts of the case, to lead evidence on the transaction under which the cheque was issued. The learned Magistrate, in such circumstances went wrong in casting the burden on the complainant to prove the transaction to sustain the prosecution set up against the accused. 6. The decision cited by the learned counsel for the accused Joseph Sartho v. Gopinathan Nair (2008 (4) KLT 509) has no application to the facts of the case, where it has not been established that any part payment had been received by the complainant in respect of any sum covered by Ext.P1 cheque. The admission of the complainant that he received Rs.15,000/- with an explanation that it was in respect of a different transaction will not assist the accused so long as it has not been established that the receipt of that amount was CRL.A.26/02 15 after the issue of Ext.P1 cheque. Similarly, the decision rendered by the apex court, namely, Krishna Janardhan Bhat v. Dattatraya G. Hegde (2008 (1) KHC 410 (SC)) relied on by the counsel as regards the burden cast upon the accused to rebut the presumption is also of no assistance to the accused in the present case. Here the accused has practically conceded by his own admission that the cheque was supported by consideration and it has been issued in discharge of a debt or liability. What he had contended is that part payment had been made and the transaction under which the cheque was issued was different from that canvassed by the complainant in his complaint. Part payment of any sum under the instrument was not established. The cheque was issued in connection with a different transaction that circumstance by itself, even if found proved, will not exonerate him from his liability or relieve him from penalty when the instrument issued by him was dishonoured due to insufficiency of funds. The evidence of DW1 examined by the accused to show that there was part payment need be taken note of only for discarding it where the accused, from the suggestive CRL.A.26/02 16 questions made to PW1, had contended that even part payments were made only after collecting documents/receipts. Further more, on close scrutiny it is seen that evidence of DW1 is artificial and unreliable. So, this was a case where the complainant had established by convincing evidence that Ext.P1 cheque had been issued by the accused towards discharge of a debt or liability, and it was dishonoured due to insufficiency of funds in the account maintained by him. Statutory compliance had been made for the prosecution of the accused. The defence canvassed by the accused to escape from the penal consequences is found to be meritless. So, in reversal of the judgment of the acquittal, I hold the accused guilty and convict him for the offences under Section 138 of the N.I.Act. 7. Now on the question of sentence, having regard to the proved facts and circumstances involved, I am of the view that incarceration of the accused for a term is not called for, but, the punishment to be meted out has to take note that the cheque involved was issued 13 years ago, which, necessarily, CRL.A.26/02 17 requires due weightage in fixing the compensation payable. So much so, the accused is sentenced to undergo imprisonment till the rising of the court, and to pay a compensation of Rs.1 lakh under Section 357 (3) of the Cr.P.C. within two months from the date of this judgment. Compensation, if realised, shall be paid to the complainant. In default of payment of compensation, the accused shall undergo simple imprisonment for four months. The accused shall appear and his sureties to produce her before the Judicial First Class Magistrate Court, Payyannur, on 2nd June 2009, 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.26 OF 2002 (A) --------------------------------------------------------- J U D G M E N T --------------------------------------------------------- 24th March, 2009