Anandam K. v. State of Kerala and M/S Sree Gokulam Chit Fund and Finance Co. Pvt. Ltd.

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: B. Sudheendra Kumar
Judgment Date: 2018-07-25
Court Decision / Holding: The revision petition stands allowed; setting aside the conviction and sentence under Section 138 NI Act; the revision petitioner Anandam K. is acquitted; bail bond discharged.
Final Disposition: Acquitted; bail bond discharged.

Parties to the Case

Appellants / Petitioners

Anandam K. w/o Vikraman Pillai

Respondents

State of Kerala represented by the Public Prosecutor, High Court of Kerala, Ernakulam
M/S Sree Gokulam Chit Fund and Finance Co. Pvt. Ltd.

Legal Representation & Advocates

Counsels for Petitioners

• Sri K. Siju
• Sri S. Abhilash

Counsels for Respondents

• Sri E.C. Bineesh (Public Prosecutor)
• SMT. N. Sudha

Case Synopsis & Summary

Anandam K., the revision petitioner, challenges a conviction under Section 138 of the Negotiable Instruments Act, alleging that the Ext. P5 cheque was not drawn for a liability due to the complainant and that the complainant failed to establish subscription to the specific chit transaction. The case arose from a chit-fund dispute where the petitioner had issued six blank signed cheques as security; one cheque, Ext. P5, was used to file the NI Act complaint. The prosecution asserted that the petitioner’s signature on the cheque makes the offense actionable under Sec. 138, with a presumption under Sec. 139 NI Act; the petitioner admitted signing the cheque, and the case relied on documentary records to show a liability. However, crucial documents such as the ledger extract and a documentary chit variola were not produced, and the complainant could not prima facie prove the specific transaction and amount due. The court analyzed two appellate precedents: Kishan Rao (supra) and M.S. Narayana Menon @ Mani v. State of Kerala, noting that Kishan Rao’s ratio does not apply to the present facts, while Narayana Menon supports the view that absence of account details can undermine the prosecution’s case when the cheque is claimed as security. On these grounds, the courts below could not sustain the conviction, leading to acquittal on revision.

Provisions of Law Cited

Section 138 of the Negotiable Instruments Act, 1881Section 139 of the Negotiable Instruments Act, 1881

Submissions & Arguments

Contentions of Appellants / Petitioners

The revision petitioner contends that the amount covered by Ext. P5 cheque was not due to the complainant; the cheque was given as security, and essential documents proving the specific chit transaction were not produced. He submits that the lack of ledger extracts and the absence of a chit variola undermine the prosecution’s case, making the conviction unsustainable. The defense relies on the principle that without concrete transaction documents, the mere signing of a cheque cannot conclusively prove a debt.

Contentions of Respondents

The complainant maintains that the petitioner issued Ext. P5, and the presumption under Section 139 NI Act is attracted given the admitted signature and presentation of the cheque; the absence of ledger extracts is addressed by arguing that the overall record, including the chit transactions, supports the liability and the dishonor of the cheque. The State and complainant contend that the trial court’s finding should be upheld on the strength of the cheque and the statutory presumptions.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Kishan Rao (supra)	N/A	Distinguished	The court notes the Kishan Rao ratio as inapplicable to the present facts, distinguishing the case on factual differences.
M.S. Narayana Menon @ Mani v. State of Kerala and Another	(2006) 6 SCC 39	Positive	Applied to support the view that lack of documentary proof regarding the transaction can undermine the prosecution’s claim when the cheque is claimed as security, contributing to acquittal.

Extracted Judgment Text

Exact text extracted from official judgment records.

**THE HONOURABLE MR. JUSTICE B.SUDHEENDRA KUMAR** **WEDNESDAY, THE 25TH DAY OF JULY 2018 / 3RD SRAVANA, 1940** **CRA 102/2012 of SESSIONS COURT,KOLLAM DATED 01-04-2014 ST 136/2011 of J.M.F.C. - II, KARUNAGAPPALLY** **REVISION PETITIONER(S)/APPELLANT/ACCUSED** **ANANDAM K. W/O.VIKRAMAN PILLAI, MANKOIKKAL HOUSE, ACKALBHAGAM PANMANA, EDAPALLYCOTTA P.O, KOLLAM.** **BY ADVS.SRI.K.SIJU SRI.S.ABHILASH** ## **RESPONDENT(S)/RESPONDENTS/COMPLAINANT & STATE:** **1. STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **2. M/S.SREE GOKULAM CHIT FUND AND FINANCE CO.PVT.LTD. CORPORATE OFFICE AT SREE GOKULAM TOWERS NO.66 ARCOT ROAD, CHENNAI, REPRESENTED BY SRI.BHADRAN S/O.RAGHAVAN, THONDATHARAYIL HOUSE, KOZHIKODU MEKKU AYANIVELIKULANGARA VILLAGE, KARUNAGAPPALLY, KOLLAM DISTRICT 690 518.** **R2 BY ADV. SMT.N.SUDHA** **BY PUBLIC PROSECUTOR SRI.E.C. BINEESH** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 25-07-2018, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## B. SUDHEENDRA KUMAR, J. ..................................................... Crl.R.P. No. 974 of 2014 ..................................................... Dated this the 25[th] day of July, 2017 ## ORDER The revision petitioner was convicted and sentenced by the courts below under Section 138 of the N.I.Act. ## 2. Heard. 3. The learned counsel for the revision petitioner has submitted that eventhough the revision petitioner had a contention that the amount covered by Ext. P5 cheque was not due to the complainant from the revision petitioner, the courts below did not consider the said -: 2 :- Crl.R.P. No. 974 of 2014 aspect and in the said circumstances, the conviction and sentence cannot be sustained. 4. In this case, the contention of the complainant is that in order to discharge the liability in connection with a chit transaction, the revision petitioner issued Ext. P5 cheque. The revision petitioner had a contention that the revision petitioner subscribed some chits conducted by the complainant and at the time of collecting the amount in the said chits, the revision petitioner entrusted six blank signed cheques as security with the complainant and one of the said cheques had been misutilised by the complainant to file the present complaint. 5. The learned counsel for the 2[nd] -: 3 :- Crl.R.P. No. 974 of 2014 respondent/complainant has argued that since the complainant could establish that the revision petitioner issued the cheque, the presumption under Section 139 of the N.I.Act is attracted, particularly when the revision petitioner admitted his signature in the cheque and consequently, the conviction and sentence passed by the courts below were justified. The Apex Court in Kishan Rao (supra) held that the issuance of the cheque with the signature of the accused is proved and the cheque was dishonoured for the reason of insufficiency of funds, it cannot be said that the trial court is wrong in convicting the accused. 6. In this case, PW1 is the power of attorney holder of the complainant. PW1 stated that he could state about -: 4 :- Crl.R.P. No. 974 of 2014 the details of the transaction only through the records. The revision petitioner had a contention that the revision petitioner was not a subscriber of the chit in question and one of the six blank signed cheques issued by the revision petitioner in connection with the earlier chit transactions between the complainant and the revision petitioner had been misutilized by the complainant to file the present complaint. PW1 stated that the ledger extract of the account of the accused had been produced before the court. However, no such extract had been produced before the court. PW1 further stated that PW1 could not state about the quantum of amount paid by the accused in the chit in question without referring to the ledger extract. PW1 further stated that PW1 produced 'Chit Variola' to prove that the revision petitioner had chit transaction with the -: 5 :- Crl.R.P. No. 974 of 2014 complainant. However, no such 'Chit Variola' was also produced before the court by the complainant. 7. The Apex Court in M.S.Narayana Menon @ Mani v. State of Kerala and Another [(2006) 6 SCC 39] held that if the transaction is a business transaction and if the accused takes a contention that the cheque in question was issued as a security, then if the account details relating to the transaction are not produced by the complainant, it cannot be said that the contention of the accused that the cheque in question was issued as a security cannot be disbelieved. In this case, eventhough the revision petitioner had a contention that the revision petitioner did not subscribe the chit in question and that the revision petitioner had issued the cheque in question -: 6 :- Crl.R.P. No. 974 of 2014 as security in connection with the other two chit transactions with the complainant, the complainant did not incline to produce the documents relating to the transaction to prima facie prove that the revision petitioner had subscribed the chit in question and that the amount covered by Ext. P5 cheque was due to the complainant from the revision petitioner. In view of the above reason, the facts in this case are different from the facts Kishan Rao (supra) and hence the ratio in Krishna Rao is not applicable to the case in hand, particularly, when the issuance of cheque could not be proved by the complainant. It is not discernible as to why the complainant could not produce the “Chit variyola” or the account details of the chit in question to prove that the revision petitioner subscribed the chit in question and that -: 7 :- Crl.R.P. No. 974 of 2014 the amount covered by Ext. P5 cheque was due to the complainant from the revision petitioner. Since the documents pertaining to the transaction involved in this case were not produced, it has to be held that the contention of the revision petitioner is probable. Consequently, it cannot be said that the complainant succeeded in establishing that the revision petitioner executed Ext. P5 cheque as contemplated under Section 138 of the N.I.Act. In the said circumstances, the conviction and sentence passed by the courts below cannot be sustained. In the result, this Revision Petition stands allowed, setting aside the conviction and sentence passed by the courts below under Section 138 of the N.I.Act and the -: 8 :- Crl.R.P. No. 974 of 2014 revision petitioner stands acquitted for the said offence. The bail bond of the revision petitioner stands discharged. Sd/-B. SUDHEENDRA KUMAR, JUDGE. ani/ /true copy/ P.S. to Judge