IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 15TH FEBRUARY 2010 / 26TH MAGHA 1931 CRL.A.No. 380 of 2003() --------------------------------- CC.43/2002 of CHIEF JUDICIAL MAGISTRATE COURT, KOTTAYAM ................................................... APPELLANT(S): COMPLAINANT --------------------------------------------- K.G.JAMES, KULATHUNKAL HOUSE, ELANJI P.O., ERNAKULAM DISTRICT. BY ADV. SRI.K.PAUL KURIAKOSE RESPONDENT(S): ACCUSED & STATE ------------------------------------------------------ 1. RAVI V.K., VALIAKANDATHIL HOUSE, (VIA) ELANJI, PERUMPADAVOM P.O. 2. THE STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, ERNAKULAM. BY ADVS. SRI.V.R.GOPU FOR R1 SRI.K.N.SWAMIDASAN FOR R1 SRI.P.R.JAYAKRISHNAN, PUBLIC PROSECUTOR FOR R2. THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 15/02/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V.K.MOHANAN, J. ------------------------------- Crl.Appeal No.380 of 2003 ------------------------------- Dated this the 15th day of February, 2010. J U D G M E N T This is an appeal, at the instance of the complainant in a prosecution for the offence punishable u/s.138 of the Negotiable Instruments Act, challenging the order of acquittal passed by the court below u/s.255(1) of Cr.P.C. 2. The 1st respondent herein is the accused. The allegation in the complaint is that an amount of Rs.60,000/- was due from the accused to the complainant and towards the discharge of that liability the accused/1st respondent had issued a cheque dated 05.11.2001 drawn on S.B.T., Piravom branch, for an amount of Rs.60,000/- in favour of the complainant. According to the complainant, the said cheque when presented for encashment, returned as dishonoured along with a memo with an endorsement “refer to the drawer”. According to the complainant, consequent to the receipt of the dishonoured memo, he caused to sent a registered lawyer notice to the accused informing him regarding the dishonour of cheque and further demanding to pay the amount covered by the dishonoured cheque. According to the complainant, as the accused failed to pay 2 the amount inspite of the receipt of the notice, he had approached to the court below. 3. Based upon the sworn statement of the complainant, cognizance was taken and accordingly C.C.No.43/02 was instituted in the Chief Judicial Magistrate Court, Kottayam. On the appearance of the accused, a formal charge was framed, which was read over and explained to him, to which he pleaded not guilty. Consequently, the trial was proceeded with during which, PW1 was examined and Exts.P1 to P7 were marked from the side of the prosecution. The accused was questioned u/s.313 of Cr.P.C. and he denied the prosecution case and the evidence and circumstances emerged during the prosecution case, when the same put to him. During the time of defence evidence, one witness was examined as DW1 and one exhibit produced and marked as D1. The Trial Court by its judgment dated 7.1.2003 in C.C.No.43/02 found that the accused is not guilty of the charge levelled against him, since the cheque in question was returned with an endorsement “refer to drawer”. Ext.P1 cheque is pertained to the account of the accused and the said account is seen closed on 3 17.9.1993. On the basis of the decision of this Court in Joseph Vs. Philip Joseph reported in 2000(2) KLJ 679. The Trial Court has found that no offence is made out against the accused. Accordingly, the accused was acquitted u/s.255(1) Cr.P.C. 4. Aggrieved by the above order of acquittal, the complainant approached this court by filing Crl.M.C.No.1698/03 and by order dated 24.2.2003 in that M.C., this court has granted leave to file the appeal and accordingly the present appeal is prepared by the complainant. 5. I have heard the counsels appearing for the appellant as well as the 1st respondent. The case of the appellant/complainant is that Ext.P1 cheque for an amount of Rs.60,000/- was issued by the accused/respondent in favour of the complainant, towards the discharge of the liability that due to the complainant from the accused. According to the complainant, the cheque in the question was returned for want of sufficient fund. But Ext.P2 memo issued from S.B.T. Piravam Branch, would show that Ext.P1 cheque is returned with an endorsement “refer to drawer”. 6. In this juncture, it is relevant to note that the specific 4 defence advanced by the accused is that during the year 1982 he borrowed an amount of Rs.10,000/- from the complainant with interest @ Rs.5/- per Rs.100/- and according to the accused the cheque amount has already been repaid but the complainant has not returned the cheque which was given as a security. It is in the further case of the accused that even though the cheque amount was repaid fully, the complainant demanded a further sum of Rs.500/- as interest for which the accused was not amenable and hence the complainant due to that animosity, filed the present complaint by misusing the blank cheque issued as a security at the time of availing Rs.10,000/- from the complainant. The counsel for the appellant submitted that the Trial Court without going further and without considering the entire materials and evidence of the court, especially in the background of the pleadings of the parties and based upon the decision referred, came into the conclusion that the prosecution has failed to establish the case against the accused and accordingly found that the accused is not guilty for the offence punishable u/s.138 of the Negotiable Instruments Act. 7. It is brought out to my notice that according to the 5 complainant the cheque in question is dated 5.11.2001 and Ext.P1 cheque pertained to the account maintained by the accused. It is true that Ext.P1 cheque was returned with endorsement “refer to drawer” as evidenced by Ext.P2. This court in the decision in Salim Vs.Thomas, reported in 2004(1)KLT 816 has held in para 9 as follows:- “ If the interpretation canvassed by the accused were accepted, a person before he receives the cheque will have to ensure that the account is live. If he does not, he runs the risk of the benefit under S.138 of the N.I.Act being denied to him. That evidently would not have been the legislative intent. The Legislature takes care of normal events and does not make the law to meet rare eventualities. The Legislature must have felt that the expression “an account maintained by him” would normally cover all cases. A mischievous account holder if he retains a cheque leaf even after closure of the account to defraud an honest payee should not be permitted to go out of the net cast by S.138 of the N.I.Act. Such an interpretation would defeat the purpose of the statute. The same has to be avoided. Unless binding precedents are there which oblige the court to accept the interpretation canvassed by the learned counsel for the respondent/accused, this Court cannot be persuaded to accept that.” It is further held in the above decision in para 12 as follows, “Thus, going by the observations in NEPC Micon Ltd. (cited supra) as well as the later decision of 6 the Supreme Court in Goaplast (P) Ltd. v. Chico Ursula D`Souza (2003 (2) KLT (SC) 16), going by the language and in S.138 of the N.I.Act and drawing inspiration from observations of the Bombay High Court in the decision referred above, I have no hesitation to agree that a cheque issued by the accused on an account which he had maintained with the bank will continue to fall within the sweep of S.138 of the N.I.Act notwithstanding the fact that he had closed the account before the date of the cheque/issue of the cheque." If that be so, the case of the appellant has to be examined as to whether there was sufficient fund at the time of execution of the cheque and at the time when the cheque was presented for encashment and reached at the drawee Bank. It is equally important to note that, the court has a duty to consider whether the case of the defence was probable and the defence had succeeded in making out such probable case so as to absolve him from the liability. 8. Admittedly no such enquiry was conducted by the court below and no evidence is seen adduced by the accused towards that direction. According to the accused, he had borrowed an amount of Rs.10,000/- during the year 1982 and a blank cheque was given as a security. As per Ext.P7 extract, with respect to the account of the accused, the account was closed on 17.9.1993 7 whereas Ext.P1 cheque is dated 05.11.2001 which is pertained to the account No.2172 belonging to the accused. According to DW1, from 25.2.1983 there is no transaction in the account and therefore the account has been closed, and the same was informed to the accused by a registered notice. According to the accused, he availed of the loan from the complainant during the year 1982 and according to DW1, after 25.2.1983, there is no transaction. From the above facts, it appears that if the version of the accused is correct, after the borrowal of Rs.10,000/- by giving a blank cheque during the year 1982, there was no transaction thereafter in the account of the accused, that is from 25.2.1983. After 10 years, the bank has closed the account with effect from 17.9.1993. But Ext.P1 cheque is dated 5.11.2001. Therefore the Trial Court has to consider the above factual inputs in the light of the above two decisions and also on the basis of the subsequent authoritative pronouncement which governs the field. In order to come into a correct conclusion, I am of the view that sufficient opportunities must be given to the parties to adduce evidence based upon which alone the court can come into a correct finding. Therefore, according to me, the matter 8 requires to be remanded back to the Trial Court for fresh consideration in the light of the above discussion with liberty to parties to adduce further evidence if he is so advised. In the result, this Crl.Appeal is disposed of setting aside the judgment dated 7.1.2003 in C.C.No.43/02 of Chief Judicial Magistrate, Kottayam, and the matter is remanded back to the said court for fresh consideration and disposal after affording the appellant as well as the 1st respondent, if they so require, to adduce evidence to substantiate their contentions. Crl.Appeal is disposed of accordingly. V.K.MOHANAN, Judge. ami/