Bijini Rajan v. Diana John and State of Kerala

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE V.G.ARUN** **FRIDAY, THE 30[TH] DAY OF JUNE 2023 / 9TH ASHADHA, 1945** ## **CRL.A NO. 742 OF 2019** **AGAINST THE JUDGMENT IN CC 3394/2016 OF JUDICIAL FIRST CLASS MAGISTRATE** **COURT (NI ACT CASES) AT ERNAKULAM** ## **APPELLANT/COMPLAINANT:** **BIJINI RAJAN AGED 44 YEARS W/O.RAJAN, KALLURUMBIL HOUSE, MINI APARTMENT, 26/284, THEVARA P.O, KONTHURUTHY, KOCHI-13, ERNAKULAM DISTRICT.** **BY ADVS. T.N.SURESH V.S.ANU MON DHANUJA VETTATHU** ## **RESPONDENTS/ACCUSED/STATE:** **1 DIANA JOHN, AGED 49 YEARS W/O.JOHN, MURIKKANAMPILLI VEEDU, NETTOOR P.O, ERNAKULAM DISTRICT, PIN-682040. 2 STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **BY ADVS. SRI.ABRAHAM P.GEORGE SMT.M.SANTHY** ## **OTHER PRESENT:** ## **ADV. MAYA ANTHARJANAM, PUBLIC PROSECUTOR** **THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 30.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** CRL.A. NO.742 OF 2019 2 ## **JUDGMENT** ## **Dated this the 30[th] day of June, 2023** The appellant is the complainant in C.C. No. 3394 of 2016 of the Judicial First Class Magistrate Court (N.I. Act Cases) Ernakulam. The complaint was filed against the 1[st] respondent, alleging commission of the offence under Section 138 of the Negotiable Instruments Act. 2. In the complaint, it was alleged that the 1[st] respondent and her husband had borrowed an amount of Rs.3,00,000/- from the complainant, promising to repay the amount in six months. The 1[st] respondent and her husband failed to repay the amount and the appellant made repeated demands, which were not acceded to. Thereupon, the appellant preferred a complaint before the District Legal Services Authority and the same was taken on file as a pre-litigation petition and notice issued to the 1[st] respondent. The 1[st] respondent and her husband appeared before the Lok Adalat on 10.10.2014 and agreed to repay CRL.A. NO.742 OF 2019 3 Rs.3,00,000/- on or before 31.12.2014 and to pay 6% interest from 31.12.2014, if the amount is not paid by that date. Based on the agreement, Ext.P1 award was passed by the Lok Adalat. As the amount was not paid by 31.12.2014, the 1[st] respondent issued Ext.P2 cheque for Rs.3,22,500/- towards discharge of the liability of Rs.3,00,000/- along with interest calculated at the rate of 6% from 31.12.2014 onwards. The cheque, on presentation, was dishonoured for insufficiency of funds. The 1[st] respondent failed to pay the amount, despite issuance of notice. 3. Before the trial court, the appellant was examined as PW1 and the Postman, who had served the notice on the 1[st] respondent, as PW2 and Exts.P1 to P8 and Ext.X1 documents were marked on the complainant’s side and Exts.D1 and D2, on the defense side. 4. By the impugned judgment, the 1[st] respondent was acquitted on the ground that the interest on the amount of Rs.3,00,000/- was only Rs.21,740/-, but CRL.A. NO.742 OF 2019 4 the cheque was for Rs.22,500/-. It was therefore held that the cheque was not issued in discharge of a legally enforceable debt or liability. For reaching such conclusion, the trial court relied on the decision in **Basheer M.H. v. Wheels Auto Finance, Kaloor and Another [2017 (3) KHC 3]** , wherein the words ‘for the discharge in whole or in part, of any debt or any other liability’ appearing in Section 138 of the N.I. Act, was held to mean that the cheque must have been drawn towards the discharge of either the whole or part of any debt or other liability and if the amount covered by the cheque is more than the whole of the debt or other liability, the provisions of Section 138 of the N.I. Act will not be attracted. 5. Heard, Adv. T. N. Suresh, learned Counsel for the appellant and Adv. M. Santhy, learned Counsel for the 1[st] respondent. 6. Learned Counsel for the appellant submitted that the trial court committed gross illegality by acquitting the 1[st] respondent on the premise that the CRL.A. NO.742 OF 2019 5 amount shown in the cheque is more than the amount due to the appellant. The settlement, award and issuance of the cheque not being in dispute, the decision in **Basheer M.H. v. Wheels Auto Finance** (supra), has no application. 7. Learned Counsel for the 1[st] respondent contended that the impugned judgment warrants no interference, as it was following the dictum laid down in **Basheer M.H. v. Wheels Auto Finance** (supra). 8. Indisputably, the 1[st] respondent and her husband agreed to settle the liability by paying Rs.3,00,000/- and interest at the rate of 6%, if that amount is not paid by 31.12.2014. Ext.P1 award was passed based on the settlement. Therefore, the only question is whether, issuance of the cheque for Rs.3,22,500/-, instead of Rs.3,21,740/- can lead to the conclusion that the cheque was not issued towards a legally enforceable debt. The answer to that question is an emphatic ‘No’. As rightly pointed out by the learned Counsel for the appellant, the decision in CRL.A. NO.742 OF 2019 6 **Basheer M.H. v. Wheels Auto Finance** (supra) was rendered under entirely different facts and circumstances. Therein, the accused availed a twowheeler loan from the complainant firm and defaulted the monthly instalments. Therefore, the complainant presented the cheque given as security, by charging penal interest of 3% per month, over and above the usual interest of 18% per annum. In revision, this Court found that, the rate of penal interest claimed over and above the usual rate of interest, will works out to 54% interest per annum. Hence, the demand was found to be against the provisions of Section 7(1) of the Kerala Money-Lenders Act, exorbitant, unreasonable and against public policy. Consequently, it was held that the cheque was not issued towards a legally enforceable liability. The contextually relevant portion of that judgment reads as follows; “The words ‘for the discharge in whole or in part, of any debt or other liability’ appearing in Section 138 of the N.I. Act make it clear that the cheque must be drawn towards the discharge of either the whole or in part of any debt or other CRL.A. NO.742 OF 2019 7 liability. If the amount covered by the cheque is more than the whole of the debt or other liability, the provisions of Section 138 of the N.I. Act will not be attracted, even if the said cheque is dishonoured for insufficiency of funds. This would show that the amount covered by the cheque must be always equivalent to or lesser than the total debt or liability to the complaint.” In the instant case, the 1[st] respondent herself calculated the interest and issued the cheque for Rs.3,22,500/-. Being so, the finding that the cheque was not issued in discharge of a legally enforceable debt or liability cannot be sustained. In this regard, it is also pertinent to note that the cheque was issued pursuant to the award passed by the Lok Adalat. Such an award passed in accordance with Section 21 of the Legal Services Authority Act have all the trappings of a decree. In the result, the Criminal Appeal is allowed. The 1[st] respondent is found guilty of the offence under Section 138 of the Negotiable Instruments Act. Consequently, she is convicted and sentenced to CRL.A. NO.742 OF 2019 8 undergo simple imprisonment for a day, till rising of the court, and to pay compensation of Rs.3,22,500/-. In case of default in paying/remitting the compensation amount, the 1[st] respondent shall undergo simple imprisonment for three months. **Sd/-** **V.G.ARUN JUDGE** NB/30-6