Calicut City Service Co-operative Bank Ltd vs Aneesh Kumar and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE HARUN-UL-RASHID MONDAY, THE 22ND DAY OF JULY 2013/31ST ASHADHA, 1935 CRL.A.No. 1637 of 2011 (D) --------------------------(LEAVE TO FILE APPEAL GRANTED AS PER ORDER DTD.31.8.2011 IN Crl.L.P. 749/2011 of HIGH COURT OF KERALA) AGAINST THE JUDGMENT IN CC 433/2008 of J.M.F.C.-IV, KOZHIKODE DATED 18-10-2010 APPELLANT/COMPLAINANT: ------------------------------ CALICUT CITY SERVICE CO-OPERATIVE BANK LTD, THIRUVANNUR BRANCH, THIRUVANNUR CALICUT DISTRICT REPRESENTED BY ITS SECRETARY, SAJU JAMES S/O.C.T.JAMES, CHETTOOR, MARIKUNNU KOZHIKODE. BY ADV. SRI.P.P.JACOB RESPONDENTS/ACCUSED & STATE: --------------------------------------- 1. ANEESH KUMAR, S/O.DASAN R., AKKUNNATH HOUSE, BEHIND PNP MANKAVE, MANKAVE P.O. KOZHIKODE, PIN-673 007. 2. STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. R2 BY PUBLIC PROSECUTOR SRI.VIJU THOMAS THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 22-07-13, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **HARUN-UL-RASHID, J. -----------------------Crl.Appeal No.1637 Of 2011 ---------------------Dated this the 22[nd] day of July, 2013.** ## **J U D G M E N T** The complainant in C.C.No.433/2008 on the file of the Judicial First Class Magistrate Court -IV, Kozhikode, is the appellant. The appeal is directed against the judgment dated 18.10.2010. The accused was charged for the offence punishable under Section 138 of the Negotiable Instruments Act. The court below found that the accused is not guilty of the offence punishable under Section 138 of the Negotiable Instruments Act and he was acquitted. Parties hereinafter are referred to as arrayed in the C.C. 2. Complainant is the Calicut City Service Co-operative Bank, represented by its Secretary. The prosecution case is that the accused had availed a business loan of ` 1 Lakh from the complainant bank on 2.8.2006. As per the terms of the loan, the accused had to repay the amount with interest in 17 monthly instalments. The accused had defaulted the repayment of loan amount and as on 31.3.2008, an amount of ` 91,964/- was due from the accused in the loan account. Towards repayment of the amount due, accused had issued three cheques for ` 25,000/each drawn on Thiruvannur Branch of the complainant bank. **::2::** ## **Crl.A.No.1637 Of 2011** When presented for collection, the cheques were dishonoured and returned for want of sufficient funds in the account maintained by the accused. The cheques were dishonoured and returned on 22.4.2008, 8.4.2008 and 9.4.2008 respectively. On 6.5.2008, statutory notice was sent to the accused intimating dishonour of cheques and demanding the amount. Though the intimation was served to him by the postal authorities on 7.5.2008, the accused had not paid the cheque amount and therefore, complaint was lodged. 3. The complainant was examined as PW1. Exts.P1 to P11 were marked. No evidence was adduced by the defence side. The court below on examination of the issues that arises for consideration, held that the complainant being the banker of the accused cannot maintain a complaint alleging commission of offence punishable under Section 138 of the Negotiable Instruments act, that the complainant has not proved that Exts.P2, P3 & P4 cheques were executed by the accused and in discharge of a legally enforceable debt. The court below also found that the complainant has filed the complaint after completing the statutory formalities. **::3::** ## **Crl.A.No.1637 Of 2011** 4. After reading Section 138 of the Negotiable Instruments Act, the learned Magistrate observed that three distinct persons are mentioned under Section 138. They are drawer, banker and another person/payee. In this case the banker and the payee are one and the same, namely, the complainant. According to the learned Magistrate, another person mentioned in Section 138 of the NI Act shall be a person other than the drawer or banker and that offence will be attracted only in cases cheques were issued by the drawer to another person other than his banker. On the basis of the said observation, the court below held that the complainant being the banker of the accused cannot maintain a complaint. 5. In this case, the accused availed a loan from the complainant bank. Exts.P2 to P4 are the cheques issued by the accused. He has not adduced any evidence to show that Exts.P2 to P4 cheques were not issued by him in favour of the complainant bank. The accused was maintaining an account in the complainant's bank. The complainant therefore presented cheques in the same bank for collection and the same was dishonoured due to insufficient funds. Section 138 of the NI Act **::4::** ## **Crl.A.No.1637 Of 2011** does not specify that the payee and the banker shall not be one and the same person. In several cases with regard to the loan transaction, the drawer is maintaining account in the same bank. Therefore, the accused drawer used to issue cheques to discharge the liability. Reading Section 138 wrongly, the learned Magistrate held that another person mentioned in Section138 of the NI Act shall be a person other than a banker. There is nothing wrong by the payee in accepting a cheque drawn by the accused in the account maintained in the same bank. Therefore, the finding that the complainant being the banker of the accused cannot maintain a complaint alleging commission of offence under Section 138 of the NI Act cannot stand. The said finding is set aside. 6. The Secretary of the complainant bank was examined as PW1. All the three cheques were issued in favour of the complainant bank and they were drawn in the account maintained with the same bank. Ext.P11 is the ledger extract of loan account of the accused from 2.8.2006 to 11.1.2010. PW1 during cross-examination deposed that loan was sanctioned to the accused through Thiruvannur branch of the complainant **::5::** ## **Crl.A.No.1637 Of 2011** bank. The true extract of the loan account was taken from the head office and not from the branch where it was prepared. It was pointed out by the learned counsel for the appellant that the loan is sanctioned always by the complainant bank and the loan amount will be disbursed through the branches of the complainant bank. PW1 deposed that accused had maintained savings bank account at Thiruvannur branch and the loan amount of ` 1 Lakh was transferred to that account from where the accused had withdrawn the amount. PW1 also deposed that such details are not produced before this Court. The learned Magistrate based on the said testimony found that the documents would show that a sum of ` 1 Lakh was lent to the accused as loan and he had withdrawn the same through his savings bank account maintained with the Thiruvannur branch of the complainant, that the transaction is supported by documentary evidence, the entire records are with the complaint and no such records are produced before the court and hence the complainant has withheld the best evidence to prove the loan transaction with the accused and therefore, adverse inference has to be drawn against the complainant. The court below erroneously concluded **::6::** ## **Crl.A.No.1637 Of 2011** so. There is no necessity for the bank to produce all the records maintained by the branch office. Ext.P11 is the true extract of the loan account. Ext.P11 would show that the accused had availed a loan from the complainant bank and received the amount and issued the cheques in question. Section 4 of the Bankers' Books Evidence Act, 1891 stipulate that “ _a certified copy of any entry in a bankers' book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise_ ”. The court below simply disbelieved the evidence produced by the complaint bank for the reason that the complainant failed to produce the entire records maintained with Thiruvannur branch of the complainant and for not examining the person in charge of the Thiruvannur branch. The finding on that basis that the complainant has not proved Exts.P2 to P4 cheques executed by the accused in discharge of a legally enforceable debt also cannot stand. In the circumstance, the could below shall re-appreciate the facts and shall enter **::7::** ## **Crl.A.No.1637 Of 2011** findings afresh. Failure to adduce any evidence on the side of the accused in support of his versions also shall be taken into account while considering the matter afresh. 7. It was held in _**K.Moideen v. M.Ramesan and another**_ (2007 (3) KHC 555) that the finding of the court that presumption under Section 118 of the Negotiable Instruments Act that the cheque in question was rebutted by the accused cannot be accepted unless and until it is proved that the cheque in question was not signed by the accused. In the decision reported in _**Kumar Exports v. Sharma Carpets**_ (2009 (1) KLT 197 SC) the Apex Court held as follows: _“Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstance so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 & 139 of the Act. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some_ **::8::** ## **Crl.A.No.1637 Of 2011** _clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 & 139 of the Act will not again come to the complainant's rescue”_ . In the result, the appeal is allowed. The impugned judgment is set aside. The court below is directed to reconsider the matter. Orders shall be passed afresh after affording an opportunity of being heard to both parties within a period of six months from the date of appearance of the parties. **HARUN-UL-RASHID, Judge.** bkn/-