IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS WEDNESDAY, THE 24TH NOVEMBER 2010 / 3RD AGRAHAYANA 1932 CRL.A.No. 1310 of 2004() ------------------------ AGAINST THE JUDGEMENT/ORDER IN CRLP.448/2004 Dated 02/08/2004 CRA.447/2002 of ADDL.SESSIONS COURT, KOTTAYAM C.C.NO. 349/2002 OF CHIEF JUDICIAL MAGISTRATE COURT, KOTTAYAM .................... APPELLANT: COMPLAINANT/R1 ------------------------- M/S.MAHA RASHTRA APEX CORPORATION LTD. REGISTERED OFFICE AT SYNDICATE HOUSE, MANIPAL, UDUPI DISTRICT, REPRESENTED BY ITS ERNAKULAM BRANCH MANAGER, SRI.CHRISTY BOY.J. BY ADV. SRI.S.R.DAYANANDA PRABHU RESPONDENT(S): ACCUSED & STATE ------------------------------ 1. CIBYMON GEORGE, EDAYATHU HOUSE, KURIYANADU P.O., MONIPPALLY. 2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA. ADV. SRI.JAMES KURIAN FOR R1 R2 BY PUBLIC PROSECUTOR SHRI. P.R. JAYAKRISHNAN THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 18/11/2010, THE COURT ON 24/11/2010 DELIVERED THE FOLLOWING: M.L. JOSEPH FRANCIS, J. - - - - - - - - - - - - - - - - - - - - - - - - - - Crl.A. No. 1310 of 2004 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 24th day of November, 2010 JUDGMENT This appeal is filed by the complainant in C.C.No. 349 of 2002 on the file of the Chief Judicial Magistrate Court, Kottayam. The first respondent herein was the accused in that case, which was filed by the complainant alleging commission of offence punishable under Section 138 of the N.I. Act. 2. The case of the complainant is briefly as follows. The complainant is a financial institution registered under the Companies Act. In partial discharge of the existing liabilities the accused issued a cheque dt. 17.6.1999 in favour of the complainant drawn on the Vysya Bank Ltd., Baker Junction, Kottayam, for a sum of Rs.36,933/- The complainant presented the cheque in the bank for encashment, but it was dishonoured stating that there is no sufficient funds in the account of the Crl.A. No. 1310 of 2004 2 accused. Hence the complainant issued a registered lawyer notice to the accused informing him about the dishonour of the cheque and calling upon him to pay the amount. The accused accepted the notice, but he did not send any reply and not returned the amount. 3. In the Chief Judicial Magistrate Court, the power of attorney holder of the complainant was examined as PW1 and Exts.P1 to 6 were marked on the side of the complainant. On the defence side, the accused was examined as DW1 and Exts.D1 to 6 series were marked. The learned Chief Judicial Magistrate, on considering the evidence, convicted the accused under Section 138 of N.I. Act and he was sentenced to pay a fine of Rs.40,000/-, in default to undergo simple imprisonment for three months. Out of that fine amount, an amount of Rs.38,000/- will be paid to the complainant as compensation under Section 357(1) Cr.P.C. Against that conviction and sentence the accused filed Cr. Appeal No. 447 of 2002 before the Additional Sessions Judge, Kottayam, Crl.A. No. 1310 of 2004 3 which was allowed and the accused was found not guilty and he was acquitted. 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. Learned counsel for the appellant submitted that the appellate court ought to have found that Ext.P2 cheque dated 17.6.1999 was issued by the accused towards the discharge of the total amount payable in the transaction and that Ext.D1 notice dated 12.9.1999 issued by the complainant was for the hire instalments due from 13.10.1998 to 13.8.1999 with interest. Learned counsel for the appellant submitted that the appellate court ought to have found that the subsequent demand notice issued for a lesser amount than the actual amount does not create any ambiguity and which is not sufficient to say that the amount shown in the cheque was not really due from the accused on the date of Crl.A. No. 1310 of 2004 4 issuance of the cheque. 6. The learned counsel for the appellant invited my attention to the decision reported in Kochayippa v. Suprasidhan (2002 (2) K.L.T 652), in which it was held that even if the cheque is for a lesser amount or larger amount than the actual amount of consideration, still a cause of action would be available to the payee under Section 138 of the N.I. Act. The learned counsel for the appellant submitted that the appellate court ought to have found that the signature in the cheque is not disputed by the accused and even if the cheque is not in the hand writing of the drawer, the presumption under Section 139 of the N.I. Act is available to the complainant. The learned counsel for the first respondent supported the judgment of the appellate court. 7. When the accused was questioned under Section 313 Cr.P.C., he stated that in November 1997, he availed a loan from the complainant company under hire purchase agreement and by Crl.A. No. 1310 of 2004 5 way of security, he issued 9 cheque leaves from his account by putting his signature and writing the name of the company alone in the cheque leaves. 8. When the Power of Attorney of the complainant company was examined as PW1. He deposed that by way of hire purchase agreement the accused availed a loan of Rs.38,000/- for the purchase of a motor cycle. Out of the said amount the accused paid back some amount and when the balance amount is demanded, he issued a cheque for an amount of Rs.36,933/- in favour of the complainant. When the complainant presented the cheque for encashment, it was returned with an endorsement 'funds insufficient'. Therefore a registered lawyer notice was issued to the accused. Eventhough the accused accepted the notice, he did not send any reply or return the amount. Ext.P2 is the cheque issued to the complainant by the accused. Ext.P2 dated 17.6.1999 was issued in favour of the complainant for an amount of Rs.36,933/- Ext.P3 is the memo issued by the bank, which shows that Crl.A. No. 1310 of 2004 6 the cheque is returned with an endorsement 'insufficient funds'. 9. When the accused was examined as DW1 he deposed that he availed a loan of Rs.38,300/- for purchasing a motor cycle from the complainant by way of hire purchase agreement. On the date of availing the loan itself Rs.5,000/- was realised by the complainant by way of security. After executing the agreement, nine cheque leaves were obtained by the complainant putting his signature and writing the name of the complainant alone from him. The agreement was to pay the loan amount by way of instalments at the rate of rs.1,500/- per month. He repaid an amount of Rs.17,000/- When the repayment of the amount fell in arrear, he received a lawyer notice, for which he did not give any reply. On 17.6.1999 he did not give any cheque to the complainant. The name of the payee shown in Ext.P2 is written by him and that the signature found in Ext.P2 is also that of his. The amount is not written by him. The vehicle was seized from the Kottayam branch. An amount of Rs.25,000/- was fixed as the price of the motor cycle and Ext.P2 cheque is given during the year 1997 by way of Crl.A. No. 1310 of 2004 7 security. 10. The accused has not produced any receipts to show that Rs.5,000/- was realised from him and no receipts are produced by the accused to show that he has repaid Rs.17,000/- to the complainant. The accused has not sent any reply to Ext.P4 lawyer notice sent by the complainant company. 11. Ext.D1 is a letter dated 12.9.1999 issued by the complainant company to the accused, which would show that the total amount due to the complainant from the accused for the period from 13.10.98 to 13.8.1999 is Rs.21,526.35. The learned Additional Sessions Judge found that if the balance amount as on 12.9.1999 was Rs.21,526/-, then there was no possibility for the accused to issue Ext.P2 cheque dated 17.6.1999 for an amount of Rs.36,933/-. But this is not a ground to reject the case of the complainant because the amount shown in Ext.D1 as Rs.21526/- is the amount due from the accused for the period from 13.10.98 to Crl.A. No. 1310 of 2004 8 13.8.99. 12. Ext.D2 is another notice intimating the accused that they are going to sell the vehicle that was re-possessed from the possession of the accused, if he is not paying the amount on or before 10.12.1999. Ext.D3 is a letter sent by the Registering Authority, Pala to the accused asking him whether he has any objection in transferring the vehicle in the name of the complainant. Ext.D4 is the notice regarding arbitration proceedings and Ext.D5 is the copy of the award passed by the Arbitrator and Ext.D6 series are the counter foils of the cheque book of the accused. 13. In Ext.D5, arbitration award it is stated that the complainant is entitled to recover jointly and severally from the accused and guarantors a sum of Rs.33,396/- as claimed by the complainant with future interest on a sum of Rs.25,396/- The learned Magistrate observed that on going through Ext.P2 cheque, it is seen that the name of the complainant is written in one ink Crl.A. No. 1310 of 2004 9 and the signature of the accused is also put in the same ink and the date and the amount are written in another ink. 14. The burden is on the accused to prove that when he issued Ext.P2 cheque, it contained only his signature and name of the complainant and that the other entries were made by the complainant company subsequently. But the accused failed to discharge that burden. The accused is not in a position to say on which date, month and year he actually issued Ext.P2 cheque. The evidence on record shows that the accused issued Ext.P2 cheque for the discharge of his debt or liability. When Ext.P2 was presented for encashment, it was dishonoured on the ground that there was no sufficient funds in the account of the accused. Exts.P4 and P5 would show that eventhough the accused accepted the registered lawyer notice sent by the complainant, he did not send any reply or he did not return the cheque amount. Ext.P6, the extract of the ledger kept and maintained by the bank in the account of the accused, would show Crl.A. No. 1310 of 2004 10 that at the time when Ext.P2 cheque is presented in the bank, there was only a balance of Rs.5.40 in his account. 15. Since the complainant has proved all the necessary ingredients of the offence under Section 138 of the N.I. Act the learned Magistrate is perfectly justified in convicting the accused under Section 138 of the N.I. Act and the learned Additional Sessions Judge is not justified in acquitting the accused. 16. It has come out in evidence that the complainant company obtained Ext.D5 executable arbitration award against the accused and his guarantors with regard to the same transaction. Considering the facts and circumstances of the case, I am of the view that sentencing the accused to pay a fine of Rs.5,000/- would meet the ends of justice. 17. In the result, this appeal is allowed. The judgment of acquittal of the accused in Cr. Appeal No.447 of 2002 on the file of Additional Sessions Court Kottayam is set aside. The accused Crl.A. No. 1310 of 2004 11 in C.C. No. 349 of 2002 on the file of Chief Judicial Magistrate Court, Kottayam is convicted under Section 138 of the N.I. Act and he is sentenced to pay a fine of Rs.5,000/- The said fine shall be 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 one month from today and produce a memo to that effect before the court below in case of direct payment. If the accused failed to deposit or pay the said amount within the aforesaid period, he shall suffer S.I. for a period of one month by way of default sentence. (M.L. JOSEPH FRANCIS) Judge tm Crl.A. No. 1310 of 2004 12