Tenetowl LogoTenetowl
High Court of KeralaSingle JudgePartly Allowed

C.A. NADARAJAN v. LIJO S/O SCARIA and THE STATE OF KERALA

Case / Petition Number:Crl.Rev.Pet.No.1952 of 2014

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • K. Ramakrishnan
Judgment Date
2014-11-14
Court Decision / Holding
The revision is allowed in part. The conviction under Sec. 138 NI Act is preserved, but the sentence is modified: imprisonment till rising of the court and a fine of Rs. 1,00,000; in default, three months’ simple imprisonment. If the fine is realized, it is to be paid to the complainant as compensation under Sec. 357(1)(b) CrPC. If the fine amount has already been realized via recovery proceedings under Sec. 421 CrPC, the revision petitioner may undergo substantive imprisonment and the file is to be closed, with the compensation paid. The order is to be communicated to the trial court immediately.
Final Disposition
Partly Allowed

Parties to the Case

Appellants / Petitioners

  • C.A. NADARAJAN

Respondents

  • LIJO S/O SCARIA
  • THE STATE OF KERALA

Legal Representation & Advocates

Counsels for Petitioners

  • • Sri. P.V. George (Puthiydam)

Counsels for Respondents

  • • Sri. N. Suresh (Public Prosecutor)

Case Synopsis & Summary

This Kerala High Court criminal revision concerns a private complaint under Section 138 of the Negotiable Instruments Act. The revision petitioner, C.A. Nadarajan, was convicted by the Judicial First Class Magistrate, Erattupetta, on the basis of the complainant’s assertion that he borrowed Rs 1,00,000 and issued a cheque (Ext. P1) that bounced for funds’ insufficiency (Ext. P2), with the demand notice (Ext. P4) and postal receipt (Ext. P5) evidencing non-payment. The Sessions Court dismissed the appeal and delay as time-barred (Crl. APPEAL No. 131/2010; Crl.M.P. 936/2010). The High Court admitted the revision and examined whether the accused’s defense—namely, that he had a separate transaction with one Mathew and that the cheque was handed over for security and misused—proved lack of liability to the complainant. The court upheld the conviction, noting the absence of any defence evidence and the complainant’s unchallenged testimony. However, applying the principle that the statute’s aim is to secure payment rather than punish with imprisonment, the court modified the sentence: imprisonment till rising of the court and a fine of Rs. 1,00,000, with compensation to be paid under CrPC 357(1)(b) if the fine is realized; if recovery has already occurred, substantive imprisonment may proceed and the file closed. The revision is allowed in part, with directions to implement the modified sentence and communicate the order to the trial court.

Provisions of Law Cited

Section 138 of the Negotiable Instruments ActSection 313 of the Code of Criminal ProcedureSection 357(1)(b) of the Code of Criminal ProcedureSection 421 of the Code of Criminal Procedure

Legal Doctrines & Maxims

  • Ends of justice
  • The purpose of imposing liability under Section 138 NI Act is to secure payment to the payee rather than to punish the accused with imprisonment; where possible, monetary recovery should be prioritized over incarceration.
  • Recovery proceedings may be used to satisfy compensation under CrPC 357(1)(b) and to avoid unnecessary imprisonment.

Submissions & Arguments

Contentions of Appellants / Petitioners

The applicant contends that no proved transaction existed between him and the complainant; the cheque was given to an intermediary (Mathew) as security, and the transaction with Mathew had ended; no direct loan or liability to the complainant was established; the defence has not been adequately considered, and the conviction based on sole reliance on PW1’s testimony is unsustainable. The appellant requests that the conviction be sustained only if proven by independent evidence and that the sentence be reduced to avoid penal imprisonment where the statute aims at recovery rather than punishment. The delay condonation issue and the appellate court’s discretion on mercy/ends of justice are also highlighted; the counsel urges disposal on merit in the interest of speedy justice and to align with the object of the NI Act.

Contentions of Respondents

The complainant’s case is supported by PW1 and documentary exhibits (Exts. P1–P6); a dishonour memo and demand notice were properly issued; the accused did not respond to the notice; the lower court’s conviction is legally sound and justified. The State contends that the revision should not undermine the criminal liability and that the sentence, though capable of modification, should reflect the ends of justice while ensuring payment to the complainant.

Cited Precedents (2)

Case NameCitationTreatmentExplanation
Damodar S. Prabhu v. Sayed Babalal H.JT 2010 (4) (S.C.) 457PositiveCourt relies on the principle from these decisions that the aim of Sec. 138 NI Act is to secure payment rather than punish by imprisonment; supports converting compensation into a payable amount and limiting custodial punishment.
Somanath Sarkar v. Utpal Basu Mallick2013(4) KLT 350 (S.C.)PositiveSimilarly cited to reinforce the policy of prioritizing payment of money to the payee over imposing imprisonment, aligning with the ends of justice.

Diagnostic Tool

Beta

Does this judgment govern your specific facts?

Don't risk relying on a distinguishable precedent. Enter your facts or proposition below. We will test it against C.A. NADARAJAN v. LIJO S/O SCARIA and THE STATE OF KERALA and instantly map out authorities that support, challenge, or govern your position.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN** **FRIDAY, THE 14TH DAY OF NOVEMBER 2014/23RD KARTHIKA, 1936** **Crl.Rev.Pet.No. 1952 of 2014 ()** **----------------------------------------AGAINST THE JUDGMENT IN Crl.Appeal No. 131/2010 of SESSIONS COURT, KOTTAYAM, DATED 16-07-2010 & AGAINST THE ORDER IN Crl.M.P. 936/2010 of SESSIONS COURT, KOTTAYAM, DATED 16-07-2010** **& AGAINST THE JUDGMENT IN CC 322/2004 of J.M.F.C.,ERATTUPETTA, DATED 09-08-2006** ## **REVISION PETITIONER(S)/APPELLANT/ ACCUSED:** **------------------------------------------------------------------------** **C.A.NADARAJAN, AGED 59 YEARS, S/O ACHUTHAN KARTHIKEYAN, CHULLIPARAMBIL HOUSE, MALSYAPURI P.O, VATHURUTHY, KOCHI, ERNAKULAM DISTRICT.** ## **BY ADV. SRI.P.V.GEORGE(PUTHIYIDAM)** ## **RESPONDENT(S)/RESPONDENTS/ COMPLAINANT AND STATE:** **------------------------------------------------------------------------------------------** **1. LIJO S/O SCARIA, KANJIRATHUMKAL VEEDU, KADANADU P.O., 686 653.** **2. THE STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM 682 031** ## **R2 BY PUBLIC PROSECUTOR SRI. N. SURESH** **THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 14-11-2014, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **ss** **:2:** **Crl.Rev.Pet.No. 1952 of 2014** ## **APPENDIX** **PETITIONER'S EXHIBITS** **ANNEXURE-A1- COPY OF THE DEMAND NOTICE DATED 25.10.2012 ISSUED BY THE VILLAGE OFFICER, RAMESWARAM.** **ANNEXURE-A2- COPY OF THE RECEIPT DATED 05.02.2013 ISSUED BY VILLAGE OFFICER, RAMESWARAM.** ## **RESPONDENTS EXHIBITS** ## **: NIL** _// True Copy//_ _P.A. to Judge_ ss ## **K. RAMAKRISHNAN, J.** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Crl. R. P.No.1952 of 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dated this the 14[th] day of November, 2014 ## **O R D E R** Accused in C.C.No.322/2004 on the file of the Judicial First Class Magistrate Court, Erattupetta, is the revision petitioner herein. The case was taken on file on the basis of a private complaint, filed by the first respondent against the petitioner alleging offence under Section 138 of the Negotiable Instruments Act (hereinafter called ‘the Act’). 2. The case of the complainant in the complaint was that, the revision petitioner borrowed a sum of 1,00,000/- and in discharge of that liability, he₹ had issued Ext.P1 cheque, which when presented was dishonoured for the reason ‘funds insufficient’ vide Ext.P2 dishonour memo, and this was intimated to the complainant by his banker vide Ext.P3 intimation letter. The complainant issued Ext.P4 notice to the revision petitioner intimating the dishonour and demanding 2 Crl. R. P.No.1952 of 2014 payment of the amount vide Ext.P5 postal receipt and the same was received by the revision petitioner evidenced by Ext.P6 postal acknowledgment. The revision petitioner had not paid the amount. So he had committed the offence punishable under Section 138 of the Act. Hence the complaint. 3. When the revision petitioner appeared before the court below, the particulars of offence were read over and explained to him and he pleaded not guilty. In order to prove the case of the complainant, the complainant himself was examined as PW1 and Exts.P1 to P6 were marked on his side. After closure of the complainants evidence, the revision petitioner was questioned under Section 313 of the Code of Criminal Procedure and he denied all the incriminating circumstances brought against him in the complainant's evidence. He had further stated that, he had some transaction with one Sri. V.V. Mathew, who is an employee of Industrial Security Agency, conducted by the 3 Crl. R. P.No.1952 of 2014 revision petitioner and he had given this cheque to him. Though he had paid of the amount due to the said Mathew, the cheque was not returned and mis-using the cheque, the present complaint has been filed. But no defence evidence was adduced on his side to prove this fact. Dissatisfied with the same, he filed Crl.Appeal No.131/2010 before the Sessions Court, Kottayam, along with the delay condonation application as Crl.M.P.No.936/2010 and after hearing, the learned Sessions Judge, dismissed the application for condonation of delay and consequentially dismissed the appeal also as time barred. Aggrieved by the same, the present revision has been filed by the revision petitioner/ accused before the court below with delay condonation application and the delay was condoned and the revision is posted for hearing on admission today. 4. Though notice was sent and it was returned 'unclaimed' in the delay petition and that was declared as proper service. So this court felt that further Crl. R. P.No.1952 of 2014 4 notice to the first respondent in the revision can be dispensed with and the revision can be admitted and can be disposed of on merit . 5. When the revision came up for hearing today, the counsel for the revision petitioner submitted that, this court can dispose of the revision, as no purpose will be served by sending it to the appellate court for further hearing and it is better to dispose of the case here itself on merit to avoid delay and further the fine amount has already been realised by initiating recovery proceedings, which will be seen from Annexure-A1 and A2. The counsel also submitted that, the lower court was not justified in convicting the appellant, as he had not proved the transaction. The learned Public Prosecutor supported the findings of the court below. 6. The case of the complainant in the complaint was that, the revision petitioner borrowed a sum of 1,00,000/- and in discharge of that liability he₹ had issued Ext.P1 cheque. The case of the revision 5 Crl. R. P.No.1952 of 2014 petitioner was that, he had no transaction with the complainant, but he had transaction with one V.V. Mathew, who is working under him as an employee and he had given Ext.P1 cheque as security, though the transaction between them was closed and the cheque was not returned and mis-using the cheque, the present complaint was filed. In order to prove the case of the complaint, the complainant himself was examined as PW1 and he deposed in support of his case in the complaint. Though he was cross examined at length, nothing was brought out to discredit his evidence on this aspect. Further no evidence was adduced on the side of the revision petitioner to prove his case as well. He had not sent any reply to Ext.P4 notice as well. So under the circumstances, the trial court was perfectly justified in coming to the conclusion that, the revision petitioner had committed the offence under Section 138 of the Negotiable Instruments Act and rightly convicted him for the said offence. Since even if the matter is remitted to 6 Crl. R. P.No.1952 of 2014 the appellate court, no purpose will be served and it will only prolong the matter, this court felt that, the conviction entered by the court below can be confirmed, as no illegality has been committed by the learned magistrate in convicting the revision petitioner for the offence alleged. 7. As regards the sentence is concerned, the magistrate has sentenced him to undergo simple imprisonment for four months and also to pay a compensation of 1,00,000/-, in default to undergo simple₹ imprisonment for two months more. Since the compensation has already been awarded and as has been explained in the decision reported in **Damodar S. Prabhu v. Sayed Babalal H. [JT 2010 (4) (S.C.)457]** and **[2013(4) KLT 350 (S.C.)] Somanath Sarkar v. Utpal Basu Mallick** that the purpose of the legislature to make it a penal provision is to see that, the amount is released and paid to the payee and not to punish him for non-payment of the amount by sending him to jail, this 7 Crl. R. P.No.1952 of 2014 court feels that, the compensation can be converted to fine and the substantive sentence of four months simple imprisonment can be reduced to imprisonment, till rising of the court and direction to pay, if the fine amount is realised, to the complainant as compensation under Section 357(1)(b) of the Code of Criminal Procedure and that will be sufficient and that will meet the ends of justice. So the sentence of the court below is set aside and modified as follows: The revision petitioner is sentenced to undergo imprisonment till rising of the court and also to pay a fine of ₹1,00,000/and in default to undergo simple imprisonment for three months. If the fine mount is realised, the same is directed to be paid to the complainant as compensation under Section 357 (1)(b) of the Code of Criminal Procedure. If the fine amount has already been realised by initiating recovery proceedings under Section 421 of the Code of Criminal Procedure, then court below is directed to permit the revision 8 Crl. R. P.No.1952 of 2014 petitioner to undergo substantive sentence of imprisonment and close the file and pay the compensation amount to the complainant. With the above modification of the sentence and the direction, the revision is allowed in part. Office is directed to communicate this order to the court below, immediately. Sd/- ## **K. Ramakrishnan, Judge** // True Copy // P.A. to Judge ss