High Court of KeralaSingle Judge2008-09-15Appeal allowed; acquittal set aside; remanded t...

D. Sathyaseelan v. State of Kerala

Case / Petition Number:Crl.A. No. 109 of 2003

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: V.K. Mohanan
Judgment Date: 2008-09-15
Court Decision / Holding: The trial court’s acquittal is set aside and the acquittal itself is reversed. The complaint is to be taken on file and disposed of in accordance with law, with both parties given opportunity to lead evidence. The appeal is allowed; there will be no order as to costs. The trial court is directed to proceed with the matter and to fix a date for appearance, with the matter to be disposed of after due merits and evidence, noting the date 31 October 2008 for further proceedings.
Final Disposition: Appeal allowed; acquittal set aside; remanded to take the complaint on file and dispose of it in accordance with law with opportunity to lead evidence; no order as to costs.

Parties to the Case

Appellants / Petitioners

D.SATHYASEELAN, KUTTIYIL MEDAYIL HOUSE, MURUNTHAL CHERRY, THRIKKADAVOOR VILLAGE, KOLLAM

Respondents

N.ANILKUMAR, UNNEES (THEKKE VILAYIL VEEDU), MURUNTHAL CHERRY, THRIKKADAVOOR VILLAGE, KOLLAM
The State of Kerala, represented by the Public Prosecutor, High Court of Kerala, Ernakulam

Legal Representation & Advocates

Counsels for Petitioners

• Adv. Sri B. Krishna Mani
• Sri V. Prem Chand

Counsels for Respondents

• Adv. Sri C. Unnikrishnan (Kollam)
• Public Prosecutor Sri P.A. Sabu

Case Synopsis & Summary

This is a criminal appeal filed by the complainant, D. Sathyaseelan, challenging the acquittal of the accused under Section 138 read with Section 142 of the Negotiable Instruments Act (N.I.Act) in C.C. No. 387/1999 before the Judicial Magistrate of First Class, Kollam. The trial court acquitted N. Anilkumar on the ground that the Ext. P1 cheque (for Rs. 15,000 issued on 9-11-1998) was given as security and not to discharge a debt, relying on a judgment in Sreenivasan v. State of Kerala. The appellant contends that the cheque was issued in discharge of liability and that a security cheque can still attract Section 138 if it concerns discharge of debt or liability, citing General Auto Sales v. Vijayalakshmi D. (2005 CRL.L.J.1454) and I.C.D.S.Ltd. v. Beena Shabeer (2002 CRL.L.J. 3935). The High Court of Kerala, on hearing the appeal, finds the trial court’s reasoning unsupported by the cited authorities and reverses the acquittal. It holds that the law permits consideration of the security/guarantor context, directs the trial court to take the complaint on file and proceed in accordance with law, and affords both sides an opportunity to lead evidence. The appeal is allowed with no order as to costs, and the matter is remitted for proper disposal, with appearances fixed for 31 October 2008.

Provisions of Law Cited

Section 138 of the Negotiable Instruments ActSection 142 of the Negotiable Instruments Act

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends that the acquittal is illegal and not supported by the NI Act; relying on General Auto Sales v. Vijayalakshmi D. (2005 CRL.L.J.1454) and I.C.D.S.Ltd. v. Beena Shabeer (2002 CRL.L.J. 3935), the cheque issued by a guarantor or issued as security can still be within Section 138 if issued in discharge of any debt or liability. The security-character of Ext. P1 cannot blanketly negate liability; the trial court misapplied established authorities and failed to appreciate that a cheque led to dishonour may attract Section 138 regardless of the security context.

Contentions of Respondents

The respondents (accused) contended that the cheque was given as security and thus not for discharging any debt or liability; hence, under the trial court’s reasoning, Section 138 would not be attracted. The defense relied on the trial court’s conclusion that Ext. P1 was issued on security, implying non-liability under the NI Act. The respondents maintained that the acquittal should stand if the prosecution fails to prove dishonour and the underlying debt or liability, especially in cases where security is explicitly admitted.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Sreenivasan v. State of Kerala	1999(3) KLT 849	Mentioned Only	Cited as a precedent relied upon by the trial court to support its acquittal; the High Court does not adopt this position and reverses the acquittal.
M/s. General Auto Sales v. Vijayalakshmi.D.	2005 CRL.L.J.1454	Positive	Cited by the appellant to support the proposition that a security cheque can be within the ambit of Section 138 when issued to discharge debt or liability.
I.C.D.S.Ltd. v. Beena Shabeer and another	2002 CRL.L.J. 3935	Positive	Apex Court held that a cheque issued by a guarantor cannot be said not to discharge any debt or liability; thus, maintainable under Section 138.

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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 V.K.MOHANAN MONDAY, THE 15TH SEPTEMBER, 2008 / 24TH BHADRA 1930 **CRL.A.No. 109 of 2003** ( CC.387/1999 of JUDL.MAGISTRATE OF FIRST CLASS-I, KOLLAM) .................... APPELLANT/COMPLAINANT: ---------------------------------- D.SATHYASEELAN, KUTTIYIL MEDAYIL HOUSE, MURUNTHAL CHERRY, THRIKKADAVOOR VILLAGE, KOLLAM. BY ADV. SRI.B.KRISHNA MANI SRI.V.PREMCHAND RESPONDENTS: ACCUSED/STATE: ----------------------------------------- 1. N.ANILKUMAR, UNNEES (THEKKE VILAYIL VEEDU), MURUNTHAL CHERRY, THRIKKADAVOOR VILLAGE, KOLLAM. 2. THE STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY ADV. SRI.C.UNNIKRISHNAN (KOLLAM) FOR R1 BY PUBLIC PROSECUTOR SRI.P.A.SABU. THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 15/09/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **V.K.MOHANAN, J. --------------------------------------------Crl.A.No. 109 of 2003 --------------------------------------------Dated this the 15[th] day of September, 2008** ## **J U D G M E N T** Aggrieved by judgment dated 5.7.2002 of the Judicial Magistrate of First Class-I, Kollam in C.C.No.387/1999 by which the accused was acquitted for the offence under Section 138 read with Section 142 of the Negotiable Instruments Act (for short the 'N.I.Act'), the appellant preferred this appeal. 2. C.C.No.387/1999 was instituted in the court below upon a private complaint filed by the appellant/complainant for the offence under Section 138 read with Section 142 of the N.I.Act. The case of the complainant is that the accused had borrowed an amount of Rs.15,000/- from the complainant on 9.11.1998 and towards the discharge of the said liability, he had issued Ext.P1 cheque dated 9.11.1998 which was proved through PW-1. It was the further case of the complainant that when the cheque was presented for encashment, the same was returned for want of sufficient fund. Exts.P2 to P4 are ## **Crl.A. NO.109 of 2003** ## **:-2-:** the documents proving those aspects. As the amount was not paid back, the complainant sent Ext.P5 lawyer notice on 8.12.1998 and Ext.P5(a) is the acknowledgment card to prove the receipt of Ext.P5 lawyer notice by the accused. Even after the lawyer notice, no amount was paid and hence, a complaint was filed upon which the court took cognizance. The court below found that since the complainant himself had admitted that the accused had issued Ext.P1 cheque on security, the offence under Section 138 would not be attracted in this case. The trial court relied upon a decision of this Court reported in **Sreenivasan** v. **State of Kerala** [1999(3) KLT 849] for the above proposition. It is the above acquittal that is challenged by the appellant/claimant in this appeal. 2. I have heard counsel for the appellant and also counsel for the respondents. 3. On the strength of the decision of this Court reported in **M/s.General Auto Sales** v. **Vijayalakshmi.D.** [2005 CRL.L.J.1454], the learned ## **Crl.A. NO.109 of 2003** ## **:-3-:** counsel for the appellant submits that the finding arrived at by the court below is absolutely illegal and unsupported by any authority and contrary to the provisions contained in the N.I.Act. Relying upon the decision of the Apex Court reported in **I.C.D.S.Ltd.** v. **Beena Shabeer and another** [2002 CRL.L.J. 3935], this Court had held that the cheque given by a guarantor, when bounced, was found to be within the scope of Section 138 of the N.I.Act. This Court had also held that necessarily, the cheque given as a security when bounced would be the subject matter of prosecution under Section 138 of the N.I.Act. So, the contention of the accused that Ext.P1 cheque was given only as a security will not enable him to escape from the clutches of law. The Apex Court in **I.C.D.S.Ltd's case** (cited supra) had held that the cheque issued by a guarantor cannot be said to have not been issued for the purpose of discharging any debt or liability and therefore, the complaint under Section 138 for its dishonour is maintainable. The above legal position is ## **Crl.A. NO.109 of 2003** ## **:-4-:** not disputed by counsel for the respondents. Therefore, I am of the view that the finding arrived on by the court below is not correct and the same is liable to be set aside. 4. In the result, the judgment of the trial court is set aside and the order of the acquittal of the accused is also set aside allowing this Crl.Appeal. The trial court is directed to take the complaint on file and to dispose of the same in accordance with law and on merit after giving opportunity to both the parties to substantiate their contentions and if necessary, to adduce evidence, if they are so advised. The parties are directed to appear before the court below on 31[st] October, 2008. The appeal is accordingly allowed. There will be no order as to costs. ## **V.K.Mohanan, Judge** MBS/ ## **Crl.A. NO.109 of 2003** **:-5-:** **V.K.MOHANAN, J.** -------------------------------------------- Crl.R.P.NO. OF 200 -------------------------------------------- ## **Crl.A. NO.109 of 2003** ## **:-6-:** O R D E R DATED: -6-2008 ## **Crl.A. NO.109 of 2003** **:-7-:**