IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR TUESDAY, THE 15TH JUNE 2010 / 25TH JYAISTHA 1932 Crl.Rev.Pet.No. 1074 of 1999() ------------------------------ CRA.303/1998 of SESSIONS COURT, THRISSUR CC.706/1995 of JUDL. MAGISTRATE OF FIRST CLASS COURT-I, THRISSUR .................... REVN. PETITIONER(S)/APPELLANTS/ACCUSED : --------------------- 1. R.JAYASREE, W/O.A.H.RAMANATHAN, LAKSHMI NIVAS, JANAKEYAAPADASALA LANE, THIRUVAMBADY, THRISSUR 2. PROPRIETRIX, JAY ENTERPRISES, COCHIN DEVASWOM BOARD BUILDING, ROUND NORTH, THRISSUR BY ADV. SRI.K.S.SREEKUMAR SRI.GEORGE VARGHESE(PERUMPALLIKUTTIYIL) RESPONDENT(S)/RESPONDENT (COMPLAINANT) AND STATE: ----------------------------------------------------------------- 1. THE DUNLOP INDIA LTD., REP. BY R.PARTHASARATHY, AUTHORIZED OFFICER, OFFICE MANAGER, DUNLOP INDIA LTD., SOUTHERN REGION, MADRAS. 2. STATE OF KERALA REP. BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA. R2 BY PUBLIC PROSECUTOR SRI.P.A.SALIM SRI.BABU KARUKAPADATH FOR R1 SRI.JAGAN GEORGE FOR R1 THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 15/06/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ORDER ON CRL.M.P.NO.2027/01, 9551/99 & 4951/99 IN CRRP 1074/99 DISMISSED 15/6/10 SD/-M.SASIDHARAN NAMBIAR,JUDGE. //True copy// PA to Judge. M.SASIDHARAN NAMBIAR,J. --------------------------------------------- CRL.R.P.NO.1074 OF 1999 --------------------------------------------- Dated 15th June, 2010 O R D E R Petitioner the accused in C.C.706/1995 on the file of Judicial First Class Magistrate's Court-I, Thrissur is challenging the order of remand passed by the Sessions Judge, Thrissur in Crl.A.303/1998. First respondent lodged the complaint taken cognizance by Judicial First Class Magistrate, Thrissur for the offence under section 138 of Negotiable Instruments Act as C.C.706/1995 alleging that towards Rs.8,16,294/- due to the first respondent Company from the petitioner as price of goods sold to her, she being a dealer from 1985 onwards, Ext.P1 cheque for Rs.5,32,145/- drawn in the account of the petitioner in Thrissur Branch of Central Bank of India was issued. When the cheque was presented for encashment, CRRP 1074/99 2 it was dishonoured for stop payment as well as want of sufficient funds. By Ext.P9 notice the amount was demanded. But petitioner failed to pay the amount and instead sent Ext.P11 reply disputing the liability and thereby committed the offence under section 138 of Negotiable Instruments Act. Petitioner pleaded not guilty. Learned Magistrate on the evidence of Pws.1 and 2 and Exts.P1 to P12 and DW1 and Exts.D1 to D12 found the petitioner guilty and convicted and sentenced her to fine of Rs.7,00,000/- and in default rigorous imprisonment for three months with a direction that on realisation of the fine, Rs.6,50,000/- is to be paid to the first respondent as compensation. Petitioner challenged the conviction and sentence before Sessions court, Thrissur in Crl.A.303/1998. Learned Sessions Judge on CRRP 1074/99 3 re-appreciation of the evidence confirmed the conviction but finding that Judicial First Class Magistrate could not have awarded fine above five thousand rupees set aside the sentence and remanded the case to the learned Magistrate to pass appropriate sentence in accordance with law. It is challenged in this revision. 2. Learned counsel appearing for the petitioner and learned counsel appearing for the first respondent were heard. 3. Argument of the learned counsel appearing for the petitioner is that both the courts below did not properly appreciate the evidence. It was argued that though presumption is available under Section 139 of Negotiable Instruments Act, it is only a rebuttable presumption and from the evidence CRRP 1074/99 4 it is clear that Ext.P1 cheque was not issued towards discharge of any existing debt or liability. Learned counsel pointed out that when in Ext.P9 notice was sent, the claim was that out of Rs.6,80,224.36 payable, towards payment of Rs.5,32,145/- Ext.P1 cheque was issued. But in the complaint the case is that total amount as on 30-3-1992, the date of the cheque, was Rs.8,16,294/- evidence of PW2 establishes that as on 30-3-1992, neither the amount stated in Ext.P9 notice or the complaint or the amount covered by the dishonoured cheque was due. Learned counsel pointed out that PW1 admitted that Ext.D2 statement was furnished to the petitioner, showing the transaction and the amount due and Ext.P7, the account produced by the first respondent CRRP 1074/99 5 establishes that payment due under first nine invoices shown in Ext.D2 were received by the first respondent before 30-6-1992 and PW1 deposed that that amount has been credited. It was pointed out that if that amount is deducted from the amount shown in Ext.D2 which is the amount claimed as due on 30-3-1992 in the complaint, the balance will not be the amount stated in Ext.P9 notice, but less. It was also pointed out that PW2 admitted that Rs,1,10,000/- evidenced by Ext.D7 series were received by the first respondent towards advance payment for the goods supplied and PW1 deposed that it has been credited to the account of the petitioner. It was pointed out that Ext.P7 shows that instead of crediting that amount, it has been debited, CRRP 1074/99 6 as a result total amount was shown as due from the petitioner is double the amount. Learned counsel pointed out that as is clear from Ext.D6 communication received by the petitioner from the first respondent regarding the supply deposit scheme, the amount so deposited is to be adjusted towards the amount due to the dealer. Evidence of PW2 establishes that there was a deposit of Rs.1,35,000/- which is liable to be adjusted. Learned counsel also pointed out that the payment received by the first respondent as stated in Ext.P7 with respect to the first nine invoices shown in Ext.D2 would come to Rs.1,30,940/- and amount deposited in S.D scheme and advance payment evidenced by Ext.D6 series together make total Rs.3,75,914/- and if this amount is CRRP 1074/99 7 credited to the account shown in Ext.D2, the balance cannot be the amount covered by the dishonoured cheque, which should a much lesser amount and therefore, it is proved that on 30/3/1992 the amount covered by the dishonoured cheque was not due and in any case, before the cheque was presented, the payment admitted by the first respondent was made and therefore, petitioner cannot be prosecuted for the offence under Section 138 of Negotiable Instruments Act. Learned counsel also pointed out that as per Ext.D8 letter petitioner had furnished a demand draft for Rs.9,00,000/- with a specific direction that, that amount has to be utilized for clearing the entire amount due from the petitioner and if, any balance is left with, it is to be utilized towards the CRRP 1074/99 8 debt due from her husband, the proprietor of Ramanathan Agency and though PW1 claimed that Rs.9,00,000/- was credited to the account of Ramanathan Agency, first respondent could only utilize that amount for clearing the debt or liability of the petitioner and only, if any balance remains it could be utilized for clearing the liability of Ramanathan Agency and therefore, on that ground also conviction is not sustainable. 4. Learned counsel appearing for the first respondent argued that execution of Ext.P1 cheque is admitted and in Ext.P11 reply contentions now raised were not raised by the petitioner and learned Magistrate and learned Sessions Judge rightly appreciated the evidence and found that CRRP 1074/99 9 Ext.P1 cheque was issued towards the discharge of existing liability and therefore, conviction of the petitioner is perfectly legal. 5. True, Section 139 of Negotiable Instruments Act provides for a presumption that cheque is issued towards discharge of an existing debt or liability. But that presumption is not an unrebuttable presumption. Petitioner being the drawer, is entitled to rebut the presumption by showing that though Ext.P1 cheque was issued for Rs.5,32,145/- on that day there was no existing debt or liability to that extend and therefore, she cannot be convicted for the offence under Section 138 of Negotiable Instruments Act. Petitioner being an accused is entitled to rebut the CRRP 1074/99 10 presumption under Section 139 either by adducing evidence or by making use of the evidence available on the side of the complainant. Question is whether petitioner succeeded in rebutting the presumption available under Section 139 of Negotiable Instruments Act. 6. Learned Sessions Judge rejected the case of the petitioner based on Ext.P11 reply sent by the petitioner to Ext.P9 notice, which in turn was sent by the first respondent demanding the amount covered by Ext.P1 dishonoured cheque on getting information about the dishonour. True, Ext.P11 does not contain the defences now made. But on that ground, the defence cannot be ignored or rejected. Fact that proprietary concern of the petitioner is a CRRP 1074/99 11 dealer of the first respondent company from 1985 onwards is admitted. Even according to PW2, who was examined for first respondent, practice is to supply goods to the petitioner and she has time of 30 days to clear the amount due under each invoice. Evidence of PW2 would establish that petitioner was not clearing the invoices within the period. Whatever it be, case of the first respondent is that Ext.P1 cheque was issued towards part payment of the amount due under several purchases evidenced by the invoices. Ext.P7 is relied on by the first respondent to prove that the amount covered by the dishonoured cheque was actually in arrear as on 30-3-1992. As rightly pointed out by the learned counsel appearing for the petitioner, when in Ext.P9 CRRP 1074/99 12 notice first respondent claimed that the amount due as on the date of Ext.P1 cheque was Rs.6,80,224.36/-, in the complaint the amount shown is Rs.8,16,294/-. Ext.P7 shows that the amount due is Rs.6,80,224.36. PW1 made an attempt to clarify the difference, stating that certain payments were credited subsequently. The payment so admitted are in respect of invoices Nos.41309, 41310, 41311, 41312, 41313, 41314, 41315, 41316 and 41317. Total would come to Rs.1,30,940/-. If this amount is deducted from Rs.8,16,294/- the balance will not be Rs.6,80,224.36 as admitted by PW2. More over, evidence of PW2 establishes that Rs.1,10,000/-, evidenced by Ext.D7 series, were received by the first respondent as advance from the petitioner. PW2 also admitted that credit was given to CRRP 1074/99 13 those payments. If that be so, in Ext.P7 Rs.1,10,000/- should have been credited to the account of the petitioner. Ext.P7 shows that as on 30/6/1992 Rs.1,10,000/- was debited and not credited. Though the document is shown as dated 30-4-1991, payment covered by Ext.D7 are on different dates. At the same time Ext.D2 shows the details of all the outstanding invoices as on 30-4-1992, with delivery dates which together would make out the amount of Rs.8,16,294/- stated in the complaint. First entry debited in Ext.P7 is Rs.11,750/- in invoice No.04586 dated 23-6-1992. But Ext.D2 does not show such an entry or invoice No.4586. It is not known from where this amount is claimed. If as per invoice dated 26-3-1992 Rs.11,750/- was due, it CRRP 1074/99 14 should have been shown in Ext.D2. Added to this, evidence of PW2 shows that first respondent has received deposit of Rs.1,35,000/- as admitted by DW2 and proved by Ext.D6 series. That amount is liable to be adjusted towards the amount due from the dealer. If that be so, Rs.1,35,000/- covered by S.D scheme of Rs.1,10,000/- covered by Ext.D6 series are liable to be adjusted towards the amount due from the petitioner. If these amounts are deducted from Rs.3,75,940/- from Rs.8,16,294/- stated in Ext.D2, amount due from the petitioner could only be less than the amount covered by the dishonoured cheque. If that be so, it is established that Rs.5,32,145/- was not due from the petitioner to first respondent as on 30/3/1992. If that be so, Ext.P1 cheque CRRP 1074/99 15 cannot be a cheque issued for discharge of debt or liability. Unfortunately, these aspects were not considered by the courts below and based on the presumption under Section 139 of Negotiable Instruments Act alone, petitioner was convicted. In such circumstances, conviction of the petitioner is illegal and can only be set aside. Revision is allowed. Order of remand in Crl.A.303/1998 is set aside. Petitioner is found not guilty of the offence under Section 138 of Negotiable Instruments Act in C.C.706/1995 on the file of Judicial First Class Magistrate-I, Thrissur. Petitioner is acquitted. M.SASIDHARAN NAMBIAR, JUDGE. uj.