IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS THURSDAY, THE 18TH NOVEMBER 2010 / 27TH KARTHIKA 1932 CRL.A.No. 1897 of 2004() ------------------------ (AGAINST JUDGMENT DATED 30.4.2004 IN C.C.342 OF 2000 ON THE FILE OF JUDICIAL FIRST CLASS MAGISTRATE COURT-1, NEYYATTINKARA) APPELLANT/COMPLAINANT: -------------- N.JACOB PAUL, NETTARAKONATHU VEEDU, VITTIYAM, PEYAD P.O., THIRUVANANTHAPURAM. BY ADV. SRI.L.MOHANAN LIGEY ANTONY RESPONDENTS/ACCUSED AND STATE: --------------- 1. C.GOPALAN, SEETHANKUZHI KUNNIL VEEDU, KANNAMPALLI, URIYACODE P.O., THIRUVANANTHAPURAM. 2. STATE OF KERALA, REPRESENTED BY ITS PUBLIC PROSECUTOR. PUBLIC PROSECUTOR, SRI SABU SREEDHARAN FOR R2 THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 11/11/2010, THE COURT ON 18/11/2010 DELIVERED THE FOLLOWING: M. L. JOSEPH FRANCIS, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - Crl.Appeal No: 1897 of 2004 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 18th day of November 2010 JUDGMENT This appeal is filed by the complainant in C.C. No. 342 of 2000 on the file of Judicial First Class Magistrate Court – I Neyyattinkara. The first respondent herein was the accused in that case, which was filed by the complainant alleging the commission of an offence under Section 138 of N.I. Act. 2. The case of the complainant is briefly as follows. The 1st respondent/accused borrowed a sum of Rs.31,000/- from the complainant on 18.12.1999. To discharge the said debt the accused issued two cheques both dated 18.2.2000 for Rs.16,000/- and Rs.15,000/- respectively drawn on Vellanadu Service Co-operative Bank. When the cheques were presented for encashment through his bank namely, the Thiruvananthapuram District Co-operative Crl.A. No: 1897 of 2004 :2: Bank Ltd., it was returned due to insufficiently of funds, of which information from the bank was obtained by the appellant on 20.3.2000. Therefore the complainant had demanded payment of money through lawyer's notice dated 30.3.2000. But the accused did not pay the amount. Therefore the complaint was filed. 3. Before the trial court appellant examined himself as PW1 and Exts. P1 to P8 were marked. On the side of the 1st respondent, a witness was examined as DW1 and Exts. D1 and D2 were marked. The defence of the first respondent was that he borrowed sum of Rs.20,000/- from the appellant and issued 5 blank signed cheques. The appellant then filed a case by using one of the cheques and claiming a sum of Rs.40,000/- The respondent paid the amount and got the matter settled. Though that cheque was returned, it was told that the rest of the cheques were destroyed by him. On receipt of the lawyers notice when contacted, he was told that he should pay the expenses met for the earlier case. Therefore the 1st respondent states that the present cheques are without consideration. Crl.A. No: 1897 of 2004 :3: 4. The court below on the reason that the present cheque being anterior in serial number to Ext. D1 cheque assumed that it must have been issued earlier and therefore the evidence of the appellant is not sufficient to prove the case and the 1st respondent was acquitted. Against the judgment of the acquittal the complainant filed this appeal. 5. Heard the learned counsel for the appellant and learned Public Prosecutor. 6. The learned counsel for the appellant submitted that the court below should have found that the complainant had proved all the necessary ingredients of the offece under Section 138 of N.I. Act against the accused and that the statutory presumption under Section 139 of N.I. Act has not been rebutted by the accused . The learned counsel further submitted that the court below should have noted that there was no impediment on the appellant to state about the Ext.P1 and P2 cheques in Ext.D2 and that the non-mentioning of the other cheques in Ext.D2 cuts the roots of the defence case. The learned counsel for the appellant submitted that the court below Crl.A. No: 1897 of 2004 :4: ought to have considered the fact that no reply was sent by the accused to Ext.P6 lawyer notice. He further submitted that assumption of the court below that Ext.P1 and P2 cheques bearing Serial numbers anterior to Ext.D1 could not be issued at a later stage is without basis and that it is not human course of conduct to verify the cheque numbers on each occasion when cheques are received from another at difference intervals. The learned counsel for the appellant submitted that the approach of the court below suspecting the receipt of two cheques for the amounts is also without any basis. 7. When the accused was questioned under Section 313 Cr.P.C. his case is that he borrowed an amount of Rs.20,000/- from the complainant. At that time he issued 5 blank signed cheques to the complainant. The complainant then filed a case before Judicial First Class Magistrate Court, Kattakkada by using one of the cheques. He claimed an amount of Rs.40,000/- in that case. The accused finally paid the entire amount to the complainant and got the matter settled. The complainant returned the cheque used for Crl.A. No: 1897 of 2004 :5: filing the complaint before that court alone to the accused. He informed the accused that rest of the cheques were destroyed by him. While so the accused received a notice demanding the amount covered under Ext.P1 and P2. When the complainant was contacted, he told the accused that he should be given the expense he met for prosecuting the earlier case. The accused, hence submits that two of the cheques retained by the complainant are used for filing this complaint without any consideration. 8. For proving the defence the accused examined one of his neighbours as DW1. According to DW1 the accused borrwed an amount of Rs.20,000/- from the complainant in January 1998. Five cheuqes were issued by the accused towards security. Exts.P1 and P2 included among those cheques. He further testified that the accused repaid the entire amount by making payment of Rs.200/- each for 115 days consecutively. A case was filed by the complainant against the accused before the court at Kattakkada, got settled after repaying the entire cheque amount. The cheque involved in that case was returned to the accused as per an Crl.A. No: 1897 of 2004 :6: agreement entered into between the complainant and the accused. Ext.D1 is the cheque returned to the accused. Ext.D2 is the receipt issued by the complainant at the time of settling that case. 9. In cross examination DW1 admitted that he has no full knowledge about the financial transaction of the accused. Ext.D1 is the cheque dated 3.6.1998 for Rs.40,000/- which was returned to the accused when the case pending before Kattakkada Court was settled between the complainant and accused. Ext.D2 is the letter dated 24.7.1999 issued by the complaint to the accused stating that as the accused paid the entire amount of the cheque for Rs.40,000/- the case pending before the Kattakkada Court will be withdrawn by him. In Ext.D2 nothing is stated about the Ext.P1 and P2 cheques involved in this case. Serial number of Ext.D1 cheque is 0226, serial number of Ext.P2 cheque is 0223 and that of Ext.P2 cheque is 0221. The mere fact that Ext.D1 cheque bears a posterior serial number than Ext.P1 and P2 cheques is not sufficient reason to accept the case of the accused that he gave 5 blanks cheques when he borrowed Rs.20,000/- in January 1998. Crl.A. No: 1897 of 2004 :7: 10. The complainant is examined as PW1. He deposed that on 18.12.1999 the accused borrowed Rs.31,000/- from him. The accused then issued two cheque for the said amount to be encashed after two months. Cheque number 221 was issued for Rs.15,000/- and cheque No.223 was issued for Rs.16,000/-. Both the cheques were dated 18.2.2000 and drawn on Vellanad Service Co-operative Bank Ltd., Vellanad. The cheques are marked as Exts. P1 and P2. 11. PW1 stated that he presented Exts.P1 and P2 cheques for collection at Thiruvananthapuram District Co-operative Bank, Morning and evening branch, Neyyattinkara. The cheques were dishonoured for the reason 'funds insufficient' as is evident from Ext.P3 and P4 dishonour memos. Ext.P5 is the intimation slip dated 20.3.2000 received by the complainant from his bank. The oral testimony of PW1 and Exts.P3 to P5 are sufficient to hold that Exts.P1 and P2 cheques were dishonoured for the reason 'funds insufficient'. 12. According to PW1, he got information regarding the dishonour of Exts.P1 and P2 cheques on 20.3.2000. The same is Crl.A. No: 1897 of 2004 :8: evident from Ext.P5. Ext.P6 is the demand notice issued to the accused. Postal receipt in proof of despatch is marked as Ext.P7. The accused received the notice on 3.4.2000 which is evident from Ext.P8 postal acknowledgment card. The accused failed to repay the cheque amount within 15 days from 3.4.2000. The cause of action in this case arose on 18.4.2000. The complaint is seen filed on 2.5.2000. It is well within the statutory limit. 13. It has come out in evidence that Ext.P6 notice sent by the complainant demanding payment of amount was accepted by the accused. But he did not send any reply. Consequently the accused miserably failed to avail his first and best opportunity to set forth his defence and to prevent the complaint from taking legal action, if the defence is true. In appreciating the evidence on record, I am of the view that the complainant has succeeded in proving all the ingredients to arrive at a finding that the accused committed the offence punishable under Section 138 of N.I. Act and that the accused failed to rebut the presumption under Sec. 139 of N.I. Act. Therefore the learned Magistrate is not justified in acquitting the Crl.A. No: 1897 of 2004 :9: accused. Since the accused has committed the offence under Section 138 of N.I. Act, he is convicted under Section 138 of N.I. Act. 14. 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.35,000/- would meet the ends of justice. 15. Accordingly this appeal is allowed. The judgment of acquittal of the accused in C.C. No. 342 of 2000 on the file of the Judicial First Class Magistrate Court No.I, Neyyattinkara under Section 138 of N.I. Act is set aside and the accused is convicted under Section 138 of N.I. Act and sentenced to pay a fine of Rs.35,000/-. 16. The said fine shall be paid as compensation to the complainant under Section 357(1) of Cr.P.C. The accused is permitted either to deposit the said fine amount before the court Crl.A. No: 1897 of 2004 :10: below or directly pay the compensation to the complainant within four months from today and produce a memo to that effect before the trial court in case of direct payment. If the accused fails to deposit or pay the said amount within the aforesaid period, the accused shall suffer simple imprisonment for one month by way of default sentence. M. L. JOSEPH FRANCIS ( Judge) dl/