IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 11TH NOVEMBER 2008 / 20TH KARTHIKA 1930 CRL.A.No. 1850 of 2004() ----------------------------------- AGAINST THE JUDGEMENT/ORDER IN CRLP.680/2004 Dated 03/11/2004 CRA.249/2002 of APPELLANT: RESPONDENT/COMPLAINANT ------------------------- T.K.CHACKOCHAN, THERUVAYIL VEETTIL, THATTARATHATTA KARA, KARIMKUNNAM VILLAGE, THODUPUZHA TALUK. BY ADV. SRI.T.V.GEORGE RESPONDENT(S): APPELLANT/ACCUSED -------------------------------- 1. P.P.PAUL S/O. PAILY, PARAYANICKAL VEETTIL, KARIMANOOR VILLAGE, THODUPUZHA. 2. STATE OF KERALA, REP BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. ADV. SRI.N.JAMES KOSHY FOR R1 GOVERNMENT PLEADER SMT.K.L.LAKSHMI RANI FOR R2 THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 11/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V. K.MOHANAN, J. ---------------------------------------------------------- Criminal Appeal No. 1850 OF 2004 ----------------------------------------------------------- Dated this the 11th day of November, 2008 J U D G M E N T This appeal as the third round litigation is instituted at the instance of the complainant in a cheque case. In this appeal, he challenges the order of acquittal passed by the Court of Additional Sessions Judge (Fast Track), Thodupuzha in Criminal Appeal No.249/2002, an appeal which preferred by the accused against C.C.No.546/2001, in which he was convicted under Section 138 of Negotiable Instrument Act and sentenced to undergo simple imprisonment for one year and he was also directed to pay the cheque amount that is Rs.2,50,000/- as compensation to PW1 under Section 357(3) of Cr.P.C. 2. In this appeal, the case of the appellant/complainant is that the accused borrowed a sum of Rs.2,50,000/- from him on 18-8-2000 and towards discharge of the said debt, the accused had issued Exhibit P1 cheque dated 5-9-2000 for an amount of Crl.A.No.1850/2004 - 2 - Rs.2,50,000/-, which when presented for encashment, dishonoured as per Exhibit P2 Memo dated 29-9-2000 received from the bank of the complainant. It is the further case of the complainant that on receipt of Exhibit P2 memo he had caused to issue Exhibit P3 notice dated 26-9-2000 through the lawyer informing the accused about the dishonour of the cheque and demanding to pay the amount covered by the cheque. According to the complainant and as evidenced by Exhibit P4, though the accused received the notice on 29-9-2000, amount was not repaid. Then the complainant approached the Judicial First Class Magistrate Court-II, Thodupuzha by filing a complaint under Section 138 of the N.I.Act where cognizance was taken, but it was withdrawn and made over to the trial court, wherein C.C.No.546/2001 was refiled. When the accused appeared before the trial court, particulars were read over and explained to him, to which he pleaded not guilty, thus resulted in the further trial of the case, during which the complainant himself was examined as PW1 and the Secretary of the Thodupuzha Co-operative Bank, where the complainant maintaining the account, was also Crl.A.No.1850/2004 - 3 - examined as PW2. Apart from the above oral evidence, the documentary evidence such as Exhibits P1 to P5 were produced from the side of the complainant. When the accused questioned under Section 313 of Cr.P.C., he denied the incriminating circumstances came out through the evidence and his further defence is that he had not executed and issued Exhibit P1 cheque to the complainant and there was no transaction between them and no debt is due from him to the complainant. He has also a case, as defence, that Exhibit P1 cheque was the one, which he gave as security when there was a transaction between himself and one Mr.T.P.Jose. According to the defence, the said cheque was obtained by the complainant through one Sri.Sajimon and one Sri.Joseph. Based upon the rival contentions and pleadings raised by the parties the trial court formulated three points for its consideration. Finally, the trial court found that even the reason for dishonour of the cheque is “payment stopped by the drawer” the offence attracted and accordingly, the accused found guilty of the offence punishable under Section 138 of the Negotiable Instruments Act and sentenced him to Crl.A.No.1850/2004 - 4 - undergo a simple imprisonment for one year and also directed to pay the cheque amount of Rs.2,50,000/- as compensation to the complainant under Section 357(3) of Cr.P.C. 3. Aggrieved by the conviction and sentence and direction to pay compensation, the accused preferred Criminal Appeal No.249/2002 before the court of the Additional Sessions Judge - II, Thodupuzha. By its judgment dated 27-12-2003 in the above appeal, the Sessions Court set aside the finding and reversed the conviction arrived on by the trial court and acquitted the accused, and it is the above order challenged in this appeal. 4. I have heard the learned counsel for the appellant, Mr.T.V.George and Mr.N.James Koshy the learned counsel for the respondents. 5. The learned counsel for the appellant submitted that the only contention of the accused is that he had not issued Exhibit P1 cheque to the complainant, but he had admitted the Crl.A.No.1850/2004 - 5 - execution of Exhibit P1 cheque by admitting signature contained therein. All other attempts of the defence made through his 313 statement that the cheque in question was entrusted with another person and consequent complaint is not proved properly and therefore, according to the counsel, no reliance can be placed on the above version of the defence. It is also pointed out that the trial court, after considering the entire facts, circumstances, materials and evidence on record, came into a correct finding that the accused had executed Exhibit P1 cheque and the cheque was dishonoured for the stoppage of payment by the drawer and Section 138 of Negotiable Instrument Act is attracted. According to the learned counsel, the lower appellate court without assigning any valid and legal reasons interfered with the finding arrived on by the trial court and substituted its view so as to acquit the accused, which is against law and thus, the interference of this Court is absolutely necessary. 6. Per contra the learned counsel for the respondent Mr.James Koshy argued that the order of acquittal passed by the Crl.A.No.1850/2004 - 6 - lower appellate court is based upon the cogent and legal acceptable reasons and therefore, no interference of this Court is warranted. It is pointed out by the learned counsel that the specific case taken by the defence is that there was no transaction between himself and complainant and no debt was due from the accused to the complainant so as to issue such cheque and therefore, the accused did not execute Exhibit P1 cheque. It is also pointed out by the learned counsel even while sending reply notice Exhibit D1, the accused has such case, which was fully aware by the complainant. It is also pointed out by the learned counsel that by examining DW3 the accused had adduced evidence to the effect that he had preferred a complaint before the Deputy Superintendent of Police against the appellant/complainant with the prayer to get back the blank stamp paper and signed cheque from the possession of the complainant and also issued stop memo. So, according to the defence, even before the presentation of the cheque, by the complainant after putting the date as 5-9-2000, the accused has taken legal steps against misusing the cheque in question. The Crl.A.No.1850/2004 - 7 - learned counsel also submitted that the complainant has, miserably, failed to establish that Exhibit P1 cheque was dishonoured because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it or that it exceed the amount arranged to be paid so as to attract Section 138 of Negotiable Instruments Act. Therefore, according to the learned counsel for the respondent, absolutely there is no ground warranting the interference of this Court with the order of acquittal passed by the lower appellate court. 7. I have carefully considered the contentions advanced by both the counsels and also perused the materials available on record. 8. The Hon'ble apex court in the decision in Krishna Janardhan Bhat V. Dattatraya Hegde [2008 (1) KLT 425(SC)] has held that:- “The proviso appended to S.139 provides for compliance to legal requirements before a complaint Crl.A.No.1850/2004 - 8 - petition can be acted upon by a court of law. S.139 of the Act merely raises a presumption in regard to be the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under S.139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability.” In the very same decision the apex court has also held that : “Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is 'preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies. Once the accused is found to discharge his initial burden, it shifts to the complainant.” 9. In the light of the above decision merely because the complainant is in possession of a cheque signed by the accused no presumption can be drawn that such cheque is issued towards the discharge of any legally recoverable debt. After considering the entire facts and circumstances involved in this case, the lower appellate court came into a conclusion that the Crl.A.No.1850/2004 - 9 - complainant has, miserably, failed to establish the execution of the cheque and also passing of consideration. The appellate court is of the opinion that the endorsement contained in Exhibit P1 cheque was made on different occasions. The lower appellate court found that the ink of the signature in the cheque and the other endorsement in the very same cheque are in different ink. It is also observed by the appellate court it cannot be believed for a moment that the complainant parted with an amount of Rs.2,50,000/- without any interest and also without any agreement for repayment that too when he was a debtor to the Bank for Rs.4,000/- and interest. Regarding the execution of cheque the complainant gave two versions. In one version the complainant says that the accused brought the cheque after filling the entries and signing it. Another version is that Exhibit P1 was not signed by accused in his presence. The complainant has also stated that he does not know as to whose handwriting the endorsement are made in Exhibit P1 cheque. Regarding the actual place of transaction the complainant has no consistent case. Thus, the lower appellate court has found that the Crl.A.No.1850/2004 - 10 - complainant has no specific and definite case regarding the execution of Exhibit P1 cheque. 10. The inflow of the complainant's case is to be examined in the background of the defence case. Even in Exhibit D1 reply notice, the accused has offered an explanation as to how Exhibit P1 cheque reached in the hands of the complainant. It is the same reason he stated in the court at the time of the trial also. According to the defence Exhibit P1 cheque was one which he gave as security when there was a transaction between himself and one Mr.T.P.Jose. Thus, according to the accused, the said cheque was obtained by the complainant through one Sri.Sajimon and one Sri.Joseph. In order to substantiate the above case, the accused has adduced evidence. Accused had examined DW1, DW2 and DW3. DW3, the Sub Inspector of Police deposed that a complaint was filed by the accused before the Deputy Superintendent of Police on 1-9-2000 and on the basis of the such complaint, the parties were summoned to the police station. It is to be noted that, according to the complainant, Crl.A.No.1850/2004 - 11 - Exhibit P1 cheque was given to him on 18-8-2000. No explanation as to how Exhibit P1 bear the date as 05-9-2000. As per the defence evidence the accused filed a complaint with respect to the cheque on 01-09-2000. The cheque was dishonoured on 12-09-2000 for the reason of stoppage of payment by the drawer. So the materials produced by the defence substantiate the defence case. Thus, on a close analysis of the case of the complainant, it can be seen that the complainant has, miserably, failed to establish his case beyond reasonable doubt and the case of the defence appears to be more probable and thus, the accused succeeded in rebutting the presumption, which is otherwise available to the complainant under Section 139 of the Negotiable Instruments Act. Therefore, I find no fault with the finding arrived on by the appellate court that there are inconsistent version of the complainant before the court and in his complaint, regarding the transaction. The complainant miserably, failed to prove that the accused executed Exhibit P1 cheque in favour of the complainant. The lower appellate court has also correctly held that the evidence adduced Crl.A.No.1850/2004 - 12 - by the accused reveals that the defence case is more probable and believable. Thus, accordingly, the lower appellate court has held that accused is not guilty of the offence punishable under Section 139 of the Negotiable Instruments Act. I find no reason to interfere with such finding and reversing the above order of acquittal. 11. In this case, it is relevant to note that the cheque in question was dishonoured not for the reason of insufficiency of funds, but, as admitted by the complainant, 'stoppage of payment at the instance of the drawer/accused'. In order to attract Section 138 of the Negotiable Instruments Act the holder/complainant has to plead and establish that the cheque was “reported by the bank unpaid either because of the amount of money standing to the credit of that account is insufficient to honour that cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank”. In this case, there is no plea to the effect that Exhibit P1 cheque was dishonoured for want of funds or for other reasons Crl.A.No.1850/2004 - 13 - mentioned in Section 138 of the Negotiable Instruments Act. In the absence of such pleading and supporting evidence, no offence under Section 138 will attract against the accused. 12. The learned counsel for the complainant submitted that an opportunity may be given to adduce evidence to show that there was no sufficient fund in the account of the accused at the time when Exhibit P1 cheque was reached for encashment. Such request cannot be entertained in this case, since there is no pleading in the complaint to that effect. Generally, evidence are being adduced to substantiate the pleadings and as per law, if there is no pleading, no evidence can be adduced. In the present case, there is no pleading in terms of the ingredients contained Section 138 of the Negotiable Instruments Act, hence the request of the learned counsel liable to be rejected. According to me, in a prosecution under Section 138 of Negotiable Instruments Act the crucial aspect to be considered is whether the above mentioned essential ingredients under Section 138 is pleaded and proved. But those questions are not considered by Crl.A.No.1850/2004 - 14 - the trial court as well as the lower appellate court. In the absence of the pleadings in the complaint, as mentioned above, there is no scope for remanding the matter for fresh consideration on the above aspect. 13. The observation and finding of the trial court contained in para 13 of its judgment on the basis of the decision of the apex court reported in AIR 1988 SC 1057, is absolutely incorrect in view of the facts and circumstances involved in the case. It cannot be held as a general proposition of law that whenever the cheque dishonoured due to “payment stopped by the drawer” Section 138 is attracted. As in the present case, if the cheque is dishonoured for stoppage of payment by the drawer, the Court has to look into the reason and examine the correctness and legality of such direction issued by the drawer. On such analysis, if the court is satisfied that stop memo is issued in order to circumvent the penal liability connected therewith or to defeat the legislative purpose behind the very enactment of such provision, certainly the drawer can be held Crl.A.No.1850/2004 - 15 - liable; otherwise no penal liability attracted under Section 138 of the Negotiable Instruments Act. In the light of the case established by the defence in the present case, no liability can be fastened against the accused especially when there is no allegation in the complaint in terms of Section 138 of the Negotiable Instruments Act. In the light of the above facts, circumstances and discussions, I find no reason to interfere with the order of acquittal passed by the lower appellate court. Hence, there is no merit in the appeal and the same is accordingly dismissed. There is no order as to costs. Sd/- V. K.MOHANAN, JUDGE skr // True copy // P.A. to Judge.