IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN MONDAY, THE 6TH APRIL 2009 / 16TH CHAITHRA 1931 CRL.A.No. 852 of 2001() --------------------------------- ST.5503/1998 of JUDL. MAGISTRATE OF FIRST CLASS COURT, IRINJALAKUDA .................... APPELLANT/COMPLAINANT: ----------------------------------------- ALI HASSAN, S/O.AHAMED HAJI, PALAKKAT HOUSE, KONATHUKUNNU. BY ADV. MR.DINESH R.SHENOY RESPONDENT/ACCUSED/STATE: ----------------------------------------------- 1. K.M. VARGHESE, S/O.MATHU, KOLAMKANNY HOUSE, VELLANGALLUR. 2. STATE OF KERALA, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. R2 BY PUBLIC PROSECUTOR SMT.PUSHPALATHA M.K. R1 BY ADV. MR.P.K. JOSE SMT.TESSY JOSE THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 06/04/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Rs/ S.S.SATHEESACHANDRAN, J. ------------------------------- CRL.APPEAL.NO.852 OF 2001 () ----------------------------------- Dated this the 6th day of April, 2009 J U D G M E N T Complainant is the appellant. His complaint against the 1st respondent, hereinafter referred to as the 'accused' for the offence punishable under Section 138 of the Negotiable Instruments Act, in short, the 'N.I.Act', after trial, ended in a judgment of acquittal rendered in favour of the accused. Impeaching the correctness of that acquittal, the complainant has filed this appeal. 2. The case of the complainant is that towards discharge of a liability, the accused issued two cheques to him, one for Rs.45,000/- and another for Rs.50,000/-, promising encashment on presentation of the instrument before the bank in due course. The cheques presented, was however, dishonoured due to insufficiency of funds in the account maintained by the accused. Statutory notice issued intimating CRL.A.852/01 2 dishonour and demanding the sum covered by the cheques was responded with a reply notice raising untenable contentions. The amount under the cheques having been not paid, the complainant launched prosecution against the accused for the offence punishable under Section 138 of the N.I.Act. 3. The accused on appearance, pleaded not guilty when the particulars of the offence were made known. Complainant examined himself as PW1 and got marked Exts.P1 to P9 to prove his case. The accused, when questioned under Section 313 of the Cr.P.C., maintaining his innocence advanced a defence that he had a transaction relating to the sale of property with the complainant. His defence was that a property belonging to the wife of the complainant was agreed to be sold to his wife and another property belonging to him was agreed to be purchased by the complainant. Though the transaction relating to the sale of the property of the complainant's wife to his wife materialised the transaction relating to the sale of his property to the complainant, could not be completed due to the default of the complainant. He CRL.A.852/01 3 had received an advance of Rs.1,20,000/- from the complainant on execution of the agreement of sale for his property, and towards security for the amount received, three cheques had been collected by the complainant. Sum of Rs.50,000/- out of the advance received was repaid and then one of the cheques was returned. The other two instruments were retained by the complainant, who after presenting them and on dishonour of the instruments, had foisted the present case, was the defence of the accused. Though such a defence was canvassed, no evidence was adduced to support thereof. 4. The leaned Magistrate, after considering the materials produced was of the view that the case of the complainant was not acceptable for the reason that even by his evidence, as borne out by answers given by him in his cross examination, the liability, if any, the accused had was only with the wife of the complainant and he had no debt or liability to be discharged to the complainant. Since the accused had no debt or liability to be discharged to the complainant, the learned Magistrate was of the view that on the basis of Exts.P1 and P2 cheques, he had no competency to CRL.A.852/01 4 launch prosecution against the accused even if those instruments on presentation had been dishonoured. In forming such conclusion, the case of the complainant was repelled and the learned Magistrate passed the impugned judgment acquitting the accused of the offence imputed. 5. The main thrust of attack pressed into service by the learned counsel for the complainant assailing the impugned judgment of acquittal is that in order to prosecute the accused for the offence under Section 138 of the N.I.Act, the cheque dishonoured need not be issued to discharge the debt or liability of the payee or the holder in due course of the instrument and it could be the debt or liability of any other person. The learned counsel relied on Alexander v. Joseph Chacko (1993 (2) KLT 326) to contend that it is not necessary that a debt or liability should be due from the drawer. Complainant had tendered sufficient legal evidence to prove his case and there was no counter evidence from the accused to substantiate his defence is also canvased by the learned counsel to assail the conclusion formed by the learned Magistrate that the complainant could not sustain prosecution CRL.A.852/01 5 of the accused without proving that the instruments had been given to discharge liability or debt due to him from the accused. 6. I have perused the records of the case giving consideration to the submissions made by the counsel. The learned Magistrate has found fault with the complainant, for not producing the sale deed executed in favour of his wife by the wife of the accused to substantiate his case that part of the sale price covered by that document remained to be discharged. Another ground to disbelieve the case of the complainant was that the cheques had been issued for discharging a liability due to his wife under the sale of property to the wife of the accused, and, so much so, she alone was competent to proceed against the accused and not the complainant. Perusing the evidence of the complainant examined as PW1, it is seen that when a suggestive question was put to him that he had paid Rs.1,20,000/- as advance to purchase the property of the accused, his answer was that the sum paid was on a lesser side, that is, Rs.70,000/- only. The suggestive questions put and the answers given had to be CRL.A.852/01 6 appreciated in the backdrop of the defence canvassed by the accused that for collecting the advance, he had issued three cheques and one of them was returned later when a sum of Rs.50,000/- was repaid on the sale falling through and the remaining two cheques had been used for filing the complaint. The evidence of the complainant, PW1, it is seen, has a ring of truth and on the contrary, the defence canvassed by the accused which remained unsubstantiated by any material, whatsoever other than his self serving statement made at the time of his questioning under Section 313 of Cr.P.C. indicate that the plea canvassed was bereft of any bona fide and was pressed into service to wriggle out of the penal consequences arising on dishonour of the cheques issued by him. Even the suggestive questions put by the accused would indicate that he had some liability to be discharged towards the complainant. The accused had no explanation nor even any case that the cheques had been issued in blank form with signature alone. Admittedly, he has no dispute regarding his signatures in the instruments, Exts.P1 and P2. The reply notice sent by him has also not been tendered in evidence. He has not mounted the box to swear in support of his CRL.A.852/01 7 defence. All these circumstances were ignored by the learned Magistrate in appreciating the sworn testimony of the complainant who as already stated asserted that a lesser amount alone had been paid by him as advance though a suggestion was made that he had paid a much higher amount. The decision relied by the learned counsel for the complainant in Alexander v. Joseph Chacko (1993 (2) KLT 326) refers to a different situation not similar to the facts involved in the present case. A cheque can be issued by the maker of the instrument to discharge the debt or liability of another and it need not be his debt or liability, was the view taken in that decision. In the present case, the factual aspects involved are somewhat different. The complainant in evidence stated that on the sale of the property of his wife to the wife of the accused, a sum of Rs.1,00,000/- was due, for which the accused had issued two cheques. The learned Magistrate was of the view that if at all anybody had any claim over that sum, it could be only the wife of the complainant, and not the complainant. On the facts presented in the case whether the case of the complainant is acceptable has to be looked into. Whether the cheque had been issued in relation to a CRL.A.852/01 8 transaction, as presented by the complainant, can be treated as honest and bona fide, also merits consideration. If the court is satisfied that the transaction alleged by him is honest and bona fide and if it is proved that the accused had issued the cheques to discharge a debt or liability, whether it be his own or of his wife or another, towards the complainant or his wife, he cannot escape from the penal consequences once the instruments were dishonoured due to insufficiency of funds in his account. The defence of the accused would indicate that he had not returned the entire advance collected from the complainant. His liability under the cheques dishonoured is borne out by his defence. So, on careful scrutiny of the materials produced in the case, in reversal of the judgment of acquittal passed in favour of the accused, I find him guilty of the offence under Section 138 of the N.I.Act and convict him thereunder. 7. Now on the question of sentence, the incarceration of the accused for a term having regard to the nature of the offence involved is not necessary to meet the ends of justice. The accused is sentenced to undergo imprisonment till the CRL.A.852/01 9 rising of the court and to pay a compensation of Rs.95,000/-, the amount covered by the cheques, under Section 357(3) of the Cr.P.C. to the complainant within two months from the date of this judgment. In default of payment of the compensation, the accused shall undergo simple imprisonment for two months. The accused shall appear and his sureties to produce him before the Judicial First Class Magistrate Court, Irinjalakuda, on 1st July 2009, and the learned Magistrate shall execute the sentence as directed. Appeal is allowed. S.S.SATHEESACHANDRAN JUDGE prp S.S.SATHEESACHANDRAN, J. -------------------------------------------------------- CRL.A.NO.852 OF 2001 (C) --------------------------------------------------------- J U D G M E N T --------------------------------------------------------- 6th April, 2009