DAVI V. THATTIL v. JOSEPH C, STATE OF KERALA, SOUMYA KURIES AND LOANS PVT. LTD.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **TUESDAY, THE 25TH DAY OF JULY 2017/3RD SRAVANA, 1939** **Crl.Rev.Pet.No. 846 of 2017 () -------------------------------** **CRL.A 225/2013 OF SESSIONS COURT, THRISSUR. CC 451/2011 OF JUDICIAL FIRST CLASS MAGISTRATE COURT-II, THRISSUR.** **.......** ## **REVISION PETITIONER/2ND APPELLANT/2ND ACCUSED:** **---------------------------------------------** ## **DAVI.V.THATTIL, AGED 61 YEARS, S/O.VARGHESE, THATTIL PADIYATH HOUSE, CHELAKKOTTUKARA, THRISSUR.** **BY ADVS.SRI.LINDONS C.DAVIS SMT.E.U.DHANYA SRI.RAJITH DAVIS** **RESPONDENTS/RESPONDENTS & 1ST APPELLANT/COMPLAINANT & 1ST ACCUSED:** **---------------------------------------------------** **1. JOSEPH.C, AGED 58 YEARS, S/O.CHAKKAPPAN, CHAKKALAMATTATH (H), PALAYAMPARAMBU P.O. CHALAKUDY, THRISSUR.** **2. STATE OF KERALA, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA** **3. SOUMYA KURIES AND LOANS PVT. LTD., ROUND SOUTH, THRISSUR- 680 001, REP. BY OFFICIAL LIQUIDATOR, HIGH COURT OF KERALA.** - **R2 BY PUBLIC PROSECUTOR SRI.SAIGI JACOB PALATTY R3 BY SRI.K.MONI, SC** **THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 25-07-2017, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **mbr/** ## ALEXANDER THOMAS, J. ================== Crl.R.P.No. 846 of 2017 ================== Dated this the 25[th] day of July, 2017 O R D E R The petitioner is the 2[nd] accused in C.C.No.451/2011 on the file of the Judicial First Class Magistrate's Court-II, Thrissur, for offence punishable under Sec.138 of the Negotiable Instruments Act, instituted on the basis of the complaint filed by the 1[st] respondent (complainant). The trial court as per the impugned judgment dated 13.9.2013 had found A-1 and A-2 (petitioner herein) therein guilty and sentenced the petitioner (A-2) to undergo imprisonment till rising of the court and also sentenced A-1 and A-2 (petitioner herein) to pay compensation of Rs. 1,25,056/- to the complainant under Sec. 357(3) of the Cr.P.C. with a default sentence clause of simple imprisonment for three months for A-2. It is pointed out that A-3 had died during the pendency of the trial. Aggrieved by the judgment of the trial court, the petitioner herein (A-2) along with A-1 had preferred Crl.Appeal No.225/2013 before the appellate Sessions Court concerned (Court of Sessions Judge, Thrissur). The appellate court as per the impugned appellate judgment dated 13.3.2017 had upheld the conviction and had also confirmed the sentence, thereby dismissed the appeal. It is aggrieved by the said Crl.R.P.846/17 - : 2 :- concurrent findings of both the courts below that the petitioner (A-2) has preferred the instant revision petition by taking recourse to the remedies available under Sec.397 read with Sec.401 of the Cr.P.C. 2. Heard Sri.Lindons C.Davis, learned counsel appearing for the revision petitioner (A-2), Sri.K.Moni, learned Standing Counsel for O.L. appearing for R-3. In the nature of the order that is proposed to be passed in this petition, notice to R-1 (complainant) will stand dispensed with. 3. The gist of the case of the complainant is that he was subscriber in a kuri conducted by accused No.1 company and that the complainant is entitled to get a sum of Rs.98,160/- in the said kuri transaction and towards discharge of the said liability, accused 2 and 3 who are Managing Director & Deputy Chairman/Director of the said company had issued Ext.P-1 dated 27.2.2010 for Rs.98,160/- drawn from the account of the 1[st] accused company and payable in favour of the complainant. The cheque when presented was dishonoured as per Exts.P-2 and P-3 memos, consequent to which, the complainant had issued Ext.P-4 statutory demand notice dated 23.9.2010 calling upon all the accused persons to pay off the amount covered by the said cheque within a period of 15 days from the date of receipt of the said notice. The said demand notice sent by registered post was duly received by the accused persons as evident from Ext.P-5 and P-6. Since the accused did Crl.R.P.846/17 - : 3 :- not respond to the same and as the amounts were not paid, the complainant, after fulling the statutory formalities, had initiated the present complaint, which has resulted in the instant trial. 4. During the complainant has examined himself as P.W-1 and has marked Exts.P-1 to P-9 documents. The defence has not adduced any oral or documentary evidence. 5. P.W-1 has deposed broadly in consonance with the contents of his complaint. The defence taken up by the accused was to the effect that the company was about to be liquidated and many customers of the company like the complainant had put pressure on the Police authorities and that the accused persons were forced to issue cheques including the present one to the customers out of coercion in the Police Station. Except making this defence suggestion, no clinching material circumstances have been brought out in the cross examination of P.W-1 to even remotely vindicate the veracity of such a defence suggestion. Ext.P-7 is the passbook of the complainant subscriber in relation to the kuri transaction in question and on the basis of these materials, the trial court has held that there is ample evidence to show that amount of Rs.98,160/- was owed by accused No.1 kuri company to the complainant and that the cheque in question has been issued by A-2 and A-3, drawn from the account of accused No.1 company and that the cheque has been dishonoured on the ground of insufficiency of funds. There was no Crl.R.P.846/17 - : 4 :- dispute that the complainant has fulfilled the statutory formalities for the initiation of the complaint. Both the courts below have held that the complainant could successfully get the benefit the statutory presumption under Sec. 118(a) and Sec. 139 of the N.I. Act. No proper evidence was let in by the accused to rebut the said statutory permission. It is on this basis that both the courts below have concurrently found that the accused is liable to be convicted for the offence punishable under Sec. 138 of the N.I. Act. 6. Sri.Lindons C.Davis, learned counsel appearing for the revision petitioner (A-2) would argue that this Court, as the Company Court constituted under the provisions of the Companies Act, 1956, has ordered winding up of accused No.1 company as per order dated 15.11.2011 in C.P.No.11/2010 and that the criminal proceedings are liable to be interdicted and stayed in view of the provisions contained in Sec. 446 of the Companies Act, 1956. The matter in issue in that regard is no longer res integra and is fully covered against the petitioner herein by virtue of the ratio decidendi of various decisions of this Court as the one rendered by the Division Bench of this Court in Jose Antony Kokkad. Official Liquidator reported in 2000 (1) KLJ 757 as well as various other judgments as in Jose Antony Kokkad. Official Liquidator reported in 1998 CrLJ 4095, K.P.Devassy v. The Official Liquidator, reported in 1997 (2) KLJ 243, etc. Therefore, the said argument of the petitioner is only to Crl.R.P.846/17 - : 5 :- be overruled and it is so accordingly ordered. The petitioner's counsel would also place reliance on the order dated 23.11.2006 of the Delhi High Court in Crl.M.C.No. 2595/2004 in the case M.L.Gupta & Anr. v. Ceat Financial Services Ltd. reported in 2008 KHC 6269. It is not in dispute that in the instant case, the dishonour of the cheque is on 28.8.2010 as per Ext.P-3 and Ext.P-4 statutory demand notice was served on the accused as per Ext.P-6 on 27.9.2010 and therefore 15 days from the date of receipt of the said notice would fall on 12.10.2010. But the winding up order has been passed by this Court only on 15.11.2010 in C.P.No. 11/2010. Therefore, the petitioner cannot make out any case on the basis of the judgment of the Delhi High Court in view of fact that the dishonour of the cheque and the 15 days time limit from the receipt of statutory demand notice, are all prior to the winding up order. 7. Lastly, learned counsel appearing for the revision petitioner would argue that Ext.P-1 cheque is dated 27.2.2010 and the same has been dishonoured as per Ext.P-2 memo dated 28.08.2010. On this basis, it is argued by the petitioner that the six months' validity period of Ext.P-1 cheque dated 27.2.2010 is as envisaged in the first limb of clause (1) of the proviso to Sec.138 of the N.I. Act and that therefore the cheque has been presented to the drawer bank beyond the six months' validity period, etc. On a perusal of the records, it is seen that Ext.P-1 cheque is dated 27.2.2010. It is also not in dispute that the drawee bank Crl.R.P.846/17 - : 6 :- of Ext.P-1 cheque is the UCO Bank, High Way Road, Thrissur Branch. From the appendix of the trial court judgment it is seen that Ext.P-8 is the dishonour memo issued by the UCO Bank, Thrissur Branch, on 2.3.2010. The collection bank of the complainant is the State Bank of Travancore, Thrissur Main Branch and Ext.P-9 is the dishonour memo issued by the collection bank (S.B.T.) on 3.3.2010. Therefore it appears that the presentation of Ext.P-1 cheque before the drawee bank (UCO Bank) as per Ext.P-8 dated 2.3.2010 is well within the 6 months' validity period of the cheque. The learned counsel for the petitioner could not explain as to the aspects involving Ext.P-3 dishonour memo dated 23.8.2010 issued by the State Bank of Travancore. Assuming that the complaint could not be filed within 30 days' time limit, after the first presentation and that the cheque was again presented, which resulted in Ext.P-3, still it can be seen that Ext.P-3 is issued on 28.8.2010. Ext.P-3 issued by the S.B.T., which is the collection bank. Ext.P-3 by itself will not necessarily imply that the presentation of the cheque before the drawee bank was after the expiry of the six months' period. It could have been on any day on or prior to 27.8.2010. The counsel for the petitioner has handed over a photocopy of the dishonour memo dated 28.8.2010 issued by the collection Bank, (State Bank of Travancore), which appears to be Ext.P-3, as well as another dishonour memo dated 28.8.2010 issued by the drawee bank (UCO Bank). The petitioner's counsel would Crl.R.P.846/17 - : 7 :- submit that the said dishonour memo dated 28.10.2010 issued by the UCO Bank (drawee bank) would be the one referred to as Ext.P-2 dated 28.8.2010. Even if that be so, it would not necessarily prove that the cheque was presented before the drawee bank only on 28.10.2010. It could be that the cheque was presented to the drawee bank on any day on or before 27.10.2010 and it was dishonoured only subsequently on 28.10.2010. 8. More crucially it is to be noted that a new provision has been engrafted to Chapter XVII of the Negotiable Instruments Act by inserting Sec.146 thereof, with effect from 6.2.2003, as per Central Amendment Act, 55 of 2002. The said Sec.146 of the N.I. Act reads as follows: “Sec.146: Bank's slip prima facie evidence of certain facts.- The Court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved.” Therefore, on and with effect from 6.2.2003, the complainant is entitled for the presumption under Sec.146 regarding the authenticity of the bank dishonour memos. But that is not the end of the road of the accused. The accused can rebut the said statutory presumption by leading contra evidence. It is also relevant to note in this context the provision contained in clause (a) of the proviso to Sec. 138 of the N.I. Act, which reads as follows: “Sec. 138: Dishonour of cheque for insufficiency, etc., of funds in the account.-- xxx xxx xxx Crl.R.P.846/17 - : 8 :- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier” 9. It is also relevant to note that the Reserve Bank of India in exercise of the enabling powers conferred in that regard by virtue of Sec.35A read with Sec.56 of the Banking Regulations Act, 1949 has issued notification No.RBI/2011-12/251, DBOD.AML BC No.47/14.01. 001/2011-12 dated 4.11.2011 (with effect from 1.4.2012), notifying that the validity period of the cheque will henceforth stand reduced to 3 months. Therefore, on and with effect from 1.4.2012, the validity period of the cheque as envisaged in the second limb of clause (a) of the proviso to Sec. 138 will stand reduced to 3 months. Prior to 1.4.2012, the validity period of cheque is six months as envisaged in the first limb of clause (a) of the proviso to Sec. 138 of the N.I. Act. 10. The Apex Court has held in decisions as in Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. reported in (2001) 3 SCC 609 and Rameshchandra Ambalal Joshi v. State of Gujarat & Anr. reported in (2014) 11 SCC 759, that the time prescribed for presenting the cheque within the validity period is to be adjudged at the point of time of the presentation of the cheque at the drawee bank, etc. 11. If the accused persons have any case that Ext.P-1 cheque dated 27.2.2010 was actually presented before the drawee bank only after the expiry of the validity period of six months, it was for them to Crl.R.P.846/17 - : 9 :- lead evidence in that regard by summoning necessary documents and witnesses, if necessary, from the drawee bank and the collection bank to show that as a matter of fact that the cheque in question was presented before the drawee bank after the expiry of the said six months' validity period. That has not been done. Therefore, the accused persons have not rebutted the statutory presumption flowing from Sec.146 of the N.I. Act and on this basis, the complainant could sustain the benefit of the statutory presumption. That apart, it is to be noted that Ext.P-2 dishonour memo is dated 28.8.2010, which is just one day after the six months' validity period. As noted herein above, Ext.P-2 by itself will not necessarily prove that the cheque was actually presented before the drawee bank only on 28.10.2010 and the possibility that the cheque was actually presented to the drawee bank on any day on or before 27.8.2010 cannot be ruled out. Therefore, in the absence of any contra evidence let in by the accused, the abovesaid contention raised by the revision petitioner is only to be overruled and it is so ordered. 12. As regards the question of sentence, it is seen that the trial court has sentenced A-2 to undergo simple imprisonment till the rising of the court and A-1 company & A-2 are sentenced to pay compensation of Rs.1,25,056/- to the complainant under Sec.357(3) of the Cr.P.C. Admittedly the cheque amount is for Rs.98,160/- and the cheque was issued as early as on 27.2.2010. Therefore, the compensation amount Crl.R.P.846/17 - : 10 :- ordered by the trial court cannot be said to be excessive or disproportionate. The said conviction and sentence have been confirmed by the appellate court as well. Therefore, there are no grounds to interfere with the conviction and sentence and compensation imposed in this case. 13. Faced with the situation, Sri.Lindons C.Davis, the learned counsel appearing for the revision petitioner (A-2) submits that in case this Court is so inclined to uphold the conviction and the sentence, then at least time by six months' time may be granted to pay off the amount directly to the complainant. It is pointed out that the accused persons are involved in many other complaints in similar nature and they are not in a position to immediately raise the funds. In the light of these submissions, this Court is inclined to grant six months' time. Accordingly, the following orders and directions are issued: - (i) The impugned conviction imposed on the accused in this case for the offence under Sec.138 of the Negotiable Instruments Act will stand confirmed. - (ii) The petitioner herein (A-2) is given 6 months time from 1.8.2017 to pay the compensation amount of Rs.1,25,056/- to the complainant. - (iii) The revision petitioner will be at liberty to pay the amount directly the complainant. On payment of the amount, the complainant will issue receipts to the petitioner herein (A-2) so that A-2 can produce the same before the trial court to satisfy the said court about payment of the amount. - (iv) The petitioner shall appear before the trial court at 11 a.m. on 3.2.2018 to receive the sentence of imprisonment till rising of the court and to satisfy the said court about the payment of the compensation amount. Crl.R.P.846/17 - : 11 :- - (v) On default of payment of the said amount as directed above, the petitioner will have to undergo to simple imprisonment for 3 months. - (vi) Until 3.2.2018 all further coercive steps taken against the petitioner in pursuance of the execution of the impugned sentence in this case will stand deferred. - (vii) On default of the petitioner either to appear before the trial court on 3.2.2018 or on default in paying the abovesaid amount, the trial court will be at liberty to proceed against the accused, in accordance with law. With these observations and directions, the aforecaptioned for the purpose stands finally disposed of. sdk+ Sd/ALEXANDER THOMAS, JUDGE ///True Copy/// P.S. to Judge