High Court of KeralaSingle Judge2018-10-25In the result, this appeal stands dismissed.

Brahmagiri Chits India (P) Ltd. v. State of Kerala and K.P. Krishna Pillai

Case / Petition Number:CRL.A.No.296 of 2010

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: B. Sudheendra Kumar
Judgment Date: 2018-10-25
Court Decision / Holding: The appeal is dismissed; the trial court’s acquittal is not interfered with, and the accused is acquitted by the High Court, affirming the trial court’s order.
Final Disposition: In the result, this appeal stands dismissed.

Parties to the Case

Appellants / Petitioners

M/S.Brahmagiri Chits India (P) Ltd., Sabari Tower, 10th Mile, Erumakkuzhy Muri, Nooranal Village represented by its Manager (Legal), Chandrasekharan Unnithan, aged 56 years, S/O.Raghavan Unnithan, Nalayyathu Veedu, Muthukatukara Muri, Palamel Village

Respondents

State of Kerala represented by Public Prosecutor, High Court of Kerala, Ernakulam
K.P. Krishna Pillai, S/o Padmanabha Pillai, Kollamattathil Veedu, Ithithanama P.O., Kottayam

Legal Representation & Advocates

Counsels for Petitioners

• Sri S. Mohanan

Counsels for Respondents

• Sri E C Bineesh - Public Prosecutor
• Sri P. N. Mohanan

Case Synopsis & Summary

This is a Kerala High Court criminal appeal (CRL.A. No. 296 of 2010) challenging the acquittal of an accused under Section 138 of the Negotiable Instruments Act. The appellant, Brahmagiri Chits India (P) Ltd., contends that after collecting chit amounts, the subscriber defaulted on instalments and, on demand, issued Ext. P4 cheque in discharge of the liability. The trial court had acquitted the accused under Section 255(1) Cr.P.C., finding the evidence of PW1 (Legal Manager) and PW2 (Deputy General Manager) insufficient to establish the amount due and the liability, as neither maintained registers nor precise transaction particulars were produced, and there was no proof of notice or postal receipts. The appellant’s counsel urged that PW1 and PW2 testified to the cheque’s execution and the debt, and Ext. P5 (payment slip) indicated payment as per the cheque; the absence of account books should not derail the case. The counsel also relied on the Supreme Court’s decision in M.S. Narayana Menon to show that the defence could be believed where the account books are not produced. The court, however, found that the trial court’s view was reasonable and plausible, and after considering the record, dismissed the appeal, upholding the acquittal. The result is that the acquittal stands.

Provisions of Law Cited

Section 255(1) Cr.P.C.Section 138 of the Negotiable Instruments Act

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends that the accused, a chit subscriber, defaulted on instalments after collecting the chit amount, and on demand issued Ext. P4 cheque in discharge of the liability. The trial court’s acquittal under Section 255(1) Cr.P.C. was based on the perception that PW1 and PW2’s evidence about the transaction and the quantum were insufficient and that no register was produced to prove the chit details. The Amicus Curiae argued that PW1 and PW2 testified to the execution of Ext. P4 and the existence of chit transactions; the absence of registers should not negate the debtor’s obligation, and the documents (e.g., Ext. P5) coupled with the statutory requirements under NI Act should not be overruled by the lack of direct documentary records. The appellant also relied on M.S. Narayana Menon to argue that the defence may be believed when books are not produced. Ultimately, the court should reverse the acquittal, and convict if the prosecution evidence suffices.

Contentions of Respondents

The respondents contend that Ext. P4 cheque was issued in discharge of a liability arising from a chit transaction and that PW1 and PW2 established the manner of issuance and the debtor’s obligation. They argue that the notice of demand and other documentary evidence were not properly proven, and the lack of registers should not automatically exonerate the accused; nonetheless, the trial court’s doubt about the exact quantum and the completeness of the transaction record remains pertinent. They urge this Court to reverse the acquittal if the evidence shows that the cheque was issued for an outstanding debt, citing the need for proper documentary proof and compliance with the NI Act’s criteria for proof beyond reasonable doubt. They maintain that the appeal cannot be allowed merely on the valuation of ambiguous records, and the lower court’s cautious approach should be treated with deference.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
M.S.Narayana Menon alias Mani v. State of Kerala and Another	[(2006) 6 SCC 39]	Positive	Cited to illustrate that without production of account books, the defence that the cheque was issued as security may be believed, supporting acquittal in the present case. The court relies on this principle to affirm the trial court’s view.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE B.SUDHEENDRA KUMAR** **THURSDAY ,THE 25TH DAY OF OCTOBER 2018 / 3RD KARTHIKA, 1940** ## **CRL.A.No. 296 of 2010** **AGAINST THE ORDER/JUDGMENT IN ST 35/2008 of J.M.F.C. - II, MAVELIKKARA DATED 31-07-2009** ## **APPELLANT/S:** **M/S.BRAHMAGIRI CHITS INDIA (P) LTD., SABARI TOWER, 10TH MILE, ERUMAKKUZHY MURI,, NOORANAD VILLAGE REPRESENTED BY ITS MANAGER (LEGAL), CHANDRASEKHARAN UNNITHAN, AGED 56 YEARS, S/O.RAGHAVAN UNNITHAN, NALAYYATHU VEEDU, MUTHUKATTUKARA MURI, PALAMEL VILLAGE.** ## **BY ADV. SRI.S.MOHANAN** ## **RESPONDENT/S:** **1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **2 K.P.KRISHNA PILLAI, S/O.PADMANABHA PILLAI, KOLLAMATTATHIL VEEDU,, ITHITHANAM P.O., KOTTAYAM.** **R2 BY ADV. SRI.P.N.MOHANAN** ## **R1 BY SRI E C BINEESH-PUBLIC PROSECUTOR** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 25.10.2018, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **CRL.A.No. 296 of 2010** -2- ## **JUDGMENT** **The appellant is the complainant in S.T.35/2008 on the files of the court below. The appellant was acquitted under Section 255(1) Cr.P.C. by the trial court for the offence under Section 138 of the Negotiable Instruments Act (in short, 'the N.I.Act'), against which, this appeal has been filed after obtaining special leave from this Court.** **2. Since there is no representation for the appellant, this Court appointed Advocate Shri.Naveen Radhakrishnan as Amicus Curiae to argue the appeal for the appellant.** **3. Heard the learned Amicus Curiae, the** ## **CRL.A.No. 296 of 2010** -3- **learned counsel for the second respondent and the learned Public prosecutor.** **4. The contention of the appellant is that the accused was a subscriber of a chit and after collecting the chit amount, the accused defaulted payment of chit** **instalments. Thereafter, when demanded the amount, the accused issued Ext.P4 cheque in favour of the complainant.** **5. The court below acquitted the accused on the reason that the evidence of PW1 and PW2 was not sufficient to hold that the amount covered by Ext.P4 cheque was due to the complainant from the accused. The learned Amicus Curiae has argued that** ## **CRL.A.No. 296 of 2010** **PW1 and PW2 had given evidence in a convincing manner with regard to the execution of Ext.P4 cheque by the accused and in the said circumstances, the court below was not justified in acquitting the accused.** **6. PW1 was the Legal Manager of the complainant. He had no direct knowledge with regard to the transactions involved in this case. However, he stated that the accused issued Ext.P4 cheque in discharge of the liability to the complainant. PW2 is the Deputy General Manager of the complainant. PW2 claimed that he was present at the time when Ext.P4 cheque was issued by the** ## **CRL.A.No. 296 of 2010** -5- **accused. Both PW1 and PW2 stated that they were keeping the registers pertaining to the** **chit transactions. However, no such register was produced by them. PW1 and PW2 were not able to state about the quantum of amount received by the accused at the time of bidding the chit. They were also not able to state as to when the chit was bid by the accused. PW1 and PW2 stated that after committing default, notice was issued to the accused showing the liability. Ext.P6 was produced as the notice issued by the appellant to the accused. However, nothing was produced before the court to show that such a notice was sent to the accused. No** ## **CRL.A.No. 296 of 2010** -6- **postal receipt or acknowledgment card was also produced to show that Ext.P6 notice was sent to the accused. In the said circumstances, the court below found that there was no evidence to show that the accused was properly intimated with regard to the actual amount due to the complainant. 7. The complainant also did not produce any document to show that the appellant is entitled to collect 18% interest from the accused. The court below after evaluating the evidence found that without producing any document to show the details of the transaction and the number of instalment at which the chit was bid, it could not be said** ## **CRL.A.No. 296 of 2010** -7- **that the accused was bound to pay any specific sum. PW2 stated that the accused received the bid amount in cash. Ext.P5 is** **the payment slip. However, Ext.P5 would show that the amount was given to the accused as per the cheque. The court below observed that the evidence of PW2 would show that the complainant was conducting chit in contravention of the existing rules. The court below observed so on the basis of the evidence of PW2 that the complainant would give chit amount to the subscriber even if the chit is not bid by the subscriber.** **8. In this case, the court below further** ## **CRL.A.No. 296 of 2010** -8- **found that the complainant did not have a contention that Ext.P4 cheque was filled up by the accused after coming to the office and in the presence of PW1 or PW2. In the said circumstances, the court below found that the complainant failed to prove that Ext.P4 was duly executed by the accused as claimed by the complainant.** **9. The Apex Court in M.S.Narayana Menon alias Mani v. State of Kerala and Another [(2006) 6 SCC 39] held that in case of dishonour of a cheque alleged to have been issued towards outstanding dues in business dealing, if the account books are not produced by the complainant, the** ## **CRL.A.No. 296 of 2010** -9- **contention of the accused that the cheque was issued as security can be believed and the conviction can be set aside.** **10. In this case, the accused had a contention that the amount covered by the cheque was not due to the complainant, and that the cheque issued by the accused at the time when he collected the chit amount had been misutilized by the complainant to file the present complaint. Even then, the appellant did not inclin to produce any document to show that the amount covered by the cheque was due to the appellant from the accused.** **11. Having gone through the relevant** ## **CRL.A.No. 296 of 2010** -10- **inputs, I am satisfied that the view taken by the trial court is a reasonable and plausible view. In the said circumstances, I find no reason to interfere with the judgment and order of the trial court, acquitting the accused.** **In the result, this appeal stands dismissed.** Sd/- **B. SUDHEENDRA KUMAR, JUDGE** STK //TRUE COPY// //P.A. TO JUDGE//