Benny Mathew v. T.N. Saju and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN THURSDAY, THE 20TH NOVEMBER, 2008 / 29TH KARTHIKA, 1930 - **CRL.A.No. 646 of 2001 (B)** - (CC.816/1998 of JUDL.FIRST CLASS MAGISTRATE COURT, PALA) .................... APPELLANT/COMPLAINANT: --------------------------------BENNY MATHEW, S/O.JOY, MANAGING PARTNER, MATTATHIL BROTHERS & ASSOCIATES, PALA, KOTTAYAM DISTRICT. BY ADV. SRI.JAMES KURIAN RESPONDENTS/FIRST ACCUSED & STATE OF KERALA: ------------------------------------------------------------------ 1. T.N.SAJU, S/O.DAMODHARAN, THOTTAPPALLIL, KADAPPATTOOR KARA, PALA. 2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY ADV. SRI.S.PRASANTH FOR R1 BY PUBLIC PROSECUTOR SRI.P.P.LAKSHMI RANI FOR R2. THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 20/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **V.K.MOHANAN, J. --------------------------------------------Crl.A.No. 646 of 2001 B --------------------------------------------Dated this the 20[th] day of November, 2008** ## **J U D G M E N T** This appeal is preferred by the appellant who is the complainant in a proceedings under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the N.I.Act') as he is aggrieved by the order of the acquittal passed by the trial court under Section 255(1) of the Code of Criminal Procedure in favour of the first respondent/accused. 2. The allegation in the complaint is that an amount of Rs.50,000/- was due to the complainant from the accused and towards the discharge of the said liability, the accused issued a cheque dated 1.12.1997 and when the same was presented for encashment, it was dishonoured due to insufficient fund. It is also the specific case of the complainant that on such dishonour, the complainant contacted the accused on 14.1.1998 and as requested by the accused, the cheque was again presented for encashment on 14.1.1998, but the cheque was not honoured due to want of fund in the account. Consequently, a notice was caused to be issued to the accused on 23.1.1998 demanding him to pay **Crl.A.NO. 646 of 2001** ## **:-2-:** the amount. But, no amount was paid in spite of the fact that he received the notice. Thus, according to the complainant, after the compliance of the statutory formalities, he approached the court below whereupon his sworn statement was recorded. It is to be noted that the complaint was filed on behalf of the firm, Mattathil Brothers and Associates, Pala. On the basis of the sworn statement of the complainant, C.C.No.816 of 1998 was instituted whereupon in pursuance of the processes issued from the court, the accused entered appearance and he pleaded not guilty, when the particulars were read over and explained to him. In the mean while, the person representing the complainant-firm died and C.M.P.No.6219 of 1998 dated 27.1.1998 was filed seeking permission to allow Mr.Benny Mathew, S/o.Joy to continue prosecution in the place of original complainant. After hearing the said person and before the appearance of the accused, that petition was allowed. After the appearance of the accused, no step was taken to challenge the above order. Thus, during the course of trial, PW1 was examined and Exts.P1 to P8 documents were marked. The evidence which emerged out during the prosecution evidence was put to the accused and he denied the same. The accused himself was examined as DW1 and Exts.D1 **Crl.A.NO. 646 of 2001** ## **:-3-:** and D2 were marked on the side of the defence. Altogether five issues were framed by the trial court for its consideration. The trial court finally found that the complainant has not succeeded to prove his case and found that the accused was not guilty of the offence punishable under Section 138 of the N.I.Act and accordingly, he was acquitted. It is the above order of acquittal challenged in this appeal. 3. I have heard counsel for the appellant as well as the ## contesting respondent. 4. Learned counsel for the appellant submits that the grounds on the basis of which the finding was arrived on by the court below are not sustainable either on the factual background or on the legal point involved in the case. According to the learned counsel, the failure on the part of the complainant to produce the original of the document of the partnership deed or power of attorney cannot be a ground to enter into a finding against the complainant. On the strength of the decisions of this Court reported in **Kerala Arecanut Stores** v. **Ramkishore & Sons** [1974 KLT 828] and **Abdul Gafoor** v. **Abdurahiman** [1999(2) KLT 634], learned counsel submits that even if an association which is not registered can initiate prosecution by ## **Crl.A.NO. 646 of 2001** ## **:-4-:** filing a complaint. According to the learned counsel, in the present case, the photostat copy of the partnership deed is produced, but the same was not accepted by the court below and according to the learned counsel, the complainant could not produce the original as the same was in the bank. It is also pointed out by the learned counsel that the finding of the court below that the complainant failed to prove the execution of the cheque is not correct. Learned counsel submits that even going by the materials and evidence, it can be seen that the accused is not disputing the fact that the complainant/firm and the accused have entered into several transactions. It is also pointed out by the learned counsel that even according to the accused, the cheque in question was given to the original complainant connected with the earlier transaction though it was towards the security for the then transaction and therefore, the accused cannot now plead that there is no execution. For the same reason, learned counsel submits that the finding of the court below is not sustainable. In support of the finding of the court below that the complainant failed to prove the execution and transaction, the court below was of the view that the complainant failed to produce the account showing the transaction between **Crl.A.NO. 646 of 2001** ## **:-5-:** the complainant and the accused. According to the learned counsel, when the accused admitted the earlier transaction, the non-production of the account cannot be treated as a ground against the prosecution. It is also pointed out by the counsel that the legal finding of the court below, that no action under Section 138 of the N.I.Act will lie on the basis of a cheque issued towards the security, is not sustainable. 5. On the other hand, the learned counsel for the first respondent/accused submits that the finding of the court below is based upon the materials and evidence and there is no illegality or perversity so as to interfere with the order of acquittal passed by the court below. Learned counsel pointed out that the complainant has miserably failed to prove the transaction and also the execution of the cheque in question. According to the learned counsel, PW1 has no direct knowledge regarding the transaction and what he had stated before the court is only on the basis of the hearsay and therefore, absolutely there is no evidence to prove the transaction. It is also the case of counsel appearing for the first respondent that there was no explanation from the side of the complainant in not producing the original of the partnership deed and also for producing only the photo copy **Crl.A.NO. 646 of 2001** ## **:-6-:** of the partnership deed. Therefore, the finding arrived on by the court below under para 15 is absolutely correct. Learned counsel for the respondents submits that merely because the cheque in question contained the signature of the accused, it cannot be held that the cheque in question was executed and issued to the complainant towards the discharge of any liability as claimed by the complainant. In the absence of any proof regarding the transaction and also the execution of the cheque, no liability under Section 138 of the N.I.Act can be fixed against the accused. In support of the arguments, learned counsel placed reliance upon decisions of this Court reported in **Mehra** v. **Raj Kumari Bhalla** [2007(3) KLT S.N.57 (C.No.72)] and also **Gopan** v. **Tonny Varghese** [2008(1) KLT 257]. 6. I have carefully considered the contentions advanced by both the counsel as also perused the materials available on record. 7. The cheque in question covered by an amount of Rs.50,000/- which, according to the complainant, was issued by the accused towards the discharge of the liability due to the complainant. Going by the evidence and especially from the **Crl.A.NO. 646 of 2001** ## **:-7-:** defence version, it can be seen that the accused used to purchase the stationary items on credit from the complainant and the accused was having business transaction with the complainant/firm from 1997 onwards. According to the accused, he had paid the entire amount which was due to the original complainant and no amount was due to the successor, the present complainant. It is also the case of the accused that when he settled the amount, he demanded for return of the cheque which was given as a security. But, according to the defence, though it was undertaken to return the cheque, later informed that Ext.P1 cheque which was given as security had lost. According to the defence, all these facts were clearly stated in the reply notice, i.e., Ext.D1. It is relevant to note that the complainant-firm was originally represented by Sony Joseph who expired on 4.4.1998. On the death of the said Sony Joseph, his son approached the court by filing C.M.P.No.6219 of 1998 dated 27.1.1998 to permit him to prosecute the complaint which was allowed. The said development had taken place before the appearance of the accused. Probably, because of that reason, no objection was taken at that time. But, even after the appearance of the accused also, the same was not challenged. **Crl.A.NO. 646 of 2001** ## **:-8-:** However, as discernible from para 15 of the order, the learned Magistrate stated that the present complainant was allowed to prosecute the complaint as he produced the copy of the death certificate and it was, for that sole purpose, the petition was allowed. Really, the original of the partnership deed is seen not produced. The decisions cited by the learned counsel for the appellant namely, **Kerala Arecanut Stores** v. **Ramkishore & Sons** [1974 KLT 828] and **Abdul Gafoor** v. **Abdurahiman** [1999(2) KLT 634] are deserved to be considered in the present case. But, it appears that no discussion is made by the court below on the basis of the above decisions. The learned Magistrate had also found that the complainant had failed to produce the details of the account showing the transaction between the accused and the firm. Admittedly, the complainant may not have any direct knowledge regarding the transaction because the complaint itself was filed by his father. According to the defence, he had admitted the transaction between himself and the firm. The complainant ought to have produced the documents, whichever available with him to show the transaction. 8. Since the accused had admitted the transaction between himself and firm and according to him, the account was **Crl.A.NO. 646 of 2001** ## **:-9-:** settled, there is no evidence before the court from the part of the complainant or from the part of the defence. According to the defence, the cheque in question was given as a security by the accused connected with the earlier transaction and that too to the erstwhile managing partner of the firm and not to the present complainant. Therefore, the question to be considered by the court below is whether any amount was due to the complainant from the accused with respect to the transaction entered into between the accused and complainant/firm and whether the entire account was settled. If any amount is due out of such transaction, it is for the court again to decide as to whether the cheque in question can be treated as issued for the purpose of discharging the said liability. This Court in a decision reported in **General Auto Sales** v. **Vijayalakshmi** [2005(1) KLT 478], had held that even if a blank cheque had been given towards liability or even as a security, when the liability was assessed and quantified if the cheque was filled up and presented to the bank, person who had drawn the cheque could not avoid the criminal liability arising out of Section 138 of the N.I.Act. But in the present case, according to the accused, the cheque is not issued or executed in favour of the present person who prosecutes the ## **Crl.A.NO. 646 of 2001** ## **:-10-:** complaint at present for the firm. Thus, liability has to be fixed by the court after considering the authorities including the above cited decisions. 9. In the decision reported in **Johnson Scaria** v. **State of Kerala** [2006(4) KLT 290], this Court had held that the law does not mandate proof of original transaction or existence of original consideration and the foundation of liability under Section 138 of the N.I.Act is the issue of the cheque for consideration and not the existence of the original consideration. It was also held that admission of signature in a cheque goes a long way to prove due execution. It was further held that possession of the cheque by the complainant similarly goes a long way to prove issue of the cheque and the burden rests on the complainant to prove execution and issue. But, under Section 114 of the Evidence Act, appropriate inferences and presumption can be drawn in each case on the question of execution and issue of the cheque depending on the evidence available and explanations offered. But, on a perusal of the judgment of the trial court, it appears to me that no such detailed enquiry was conducted by the trial court in the given facts and circumstances of the case to find out whether the cheque in question was issued towards the ## **Crl.A.NO. 646 of 2001** ## **:-11-:** discharge of any liability that is due to the complainant/firm from the part of the accused. In the very same decision, this Court had held that the accused must prove contrary to the satisfaction of a prudent mind when the complainant established the execution and issue of the cheque. The higher standard of proof beyond reasonable doubt will not be insisted from an accused in a case under Section 138 of the N.I.Act. In the **Johnson Scaria's case** (cited supra), this Court had summarised the law in a prosecution of offence under Section 138 of the N.I.Act. 10. In the light of the above discussion and materials on record, I am of the view that the court below has not considered the entire facts and circumstances involved in the case in its correct perspective and the finding arrived on by the court below cannot be treated as correct especially in the light of the above decision of this Court cited supra. In the result of the above discussion, I am of the view that both the complainant as well as the defence failed to adduce evidence to substantiate their contentions and therefore, an opportunity can be given to both the parties to adduce evidence in the case. ## **Crl.A.NO. 646 of 2001** ## **:-12-:** In the result, the impugned judgment of the court below is set aside and the matter is remitted back to the trial court for fresh consideration in the light of the above discussion and in view of the settled position of law as per the above decision. The parties are free to adduce further evidence to substantiate their respective contentions. The court below is directed to take up the complaint on file on **20[th] December, 2008,** on which date the parties are directed to appear before the court below, and to proceed with the case in accordance with law and to dispose of it on merit, as expeditiously as possible. The Crl.Appeal is disposed of as above. **V.K.Mohanan, Judge** MBS/ ## **Crl.A.NO. 646 of 2001** ## **:-13-:** **V.K.MOHANAN, J.** -------------------------------------------- **Crl.A.NO. 646 of 2001** -------------------------------------------- ## **JUDGMENT** DATED: 20-11-2008 ## **Crl.A.NO. 646 of 2001** **:-14-:** **Abdul Gafoor** v. **Abdurahiman**