E.O. Pathrose v Southern Auto Finance and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **TUESDAY, THE 10TH DAY OF OCTOBER 2017/18TH ASWINA, 1939** ## **Crl.Rev.Pet.No. 930 of 2017 ()** **------------------------------AGAINST THE JUDGMENT IN CRL.A. NO.941/2008 OF ADDL. SESSIONS COURT-VII, ERNAKULAM DATED 23/08/2016. AGAINST THE JUDGMENT IN CC. NO.238/2008 OF JUDICIAL FIRST CLASS MAGISTRATE COURT-II, MUVATTUPUZHA DATED 24/10/2008.** **.....** ## **PETITIONER/APPELLANT/ACCUSED :** **--------------------------------------------------------** **E.O. PATHROSE, AGED 64 YEARS, S/O OUSEPH, EDASSERY HOUSE, MALAYATTOOR P.O., KALADY, ERNAKULAM DISTRICT.** ## **BY ADV. SRI.RAJESH VIJAYAN.** ## **RESPONDENTS/RESPONDENTS/COMPLAINANT & STATE:** **-------------------------------------------------------------------------------------** **1. SOUTHERN AUTO FINANCE, MUVATTUPUZHA, REPRESENTED BY MANAGER, K.V. MATHAI.** **2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **R2 BY PUBLIC PROSECUTOR SRI.JESTIN MATHEW.** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 10-10-2017, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** rs. ## **ALEXANDER THOMAS, J. ---------------------------Crl.R.P.No. 930 of 2017** **----------------------------** Dated this the 10[th] day of October, 2017 ## **ORDER** The petitioner has been indicted for the offence punishable under Section 138 of the Negotiable Instruments Act in C.C.No 238 of 2008 on the file of the Judicial First Class Magistrate Court-, II, Muvattupuzha, instituted on the basis of a complaint filed by the 1[st] respondent herein. Ext.P6, dishonoured cheque dated 30.11.2005 is for Rs.70,000/-. 2. The trial court as per the impugned judgment rendered on 24.10.2008 has convicted the accused for the above said offence and has sentenced him to undergo simple imprisonment till rising of the court and ordered him to pay a compensation amount of Rs.70,000/-along with interest thereon at the rate of 6% per annum from 30.11.2005 till date of payment in terms of Sec.357(3) of the Cr.P.C and in default thereof the accused was ordered to undergo simple imprisonment for a period of 6 months etc. The above said conviction rendered by the trial court has been confirmed by the appellate court concerned (Additional Sessions Judge-III, Crl.R.P.No. 930 of 2017 2 Ernakulam) in the impugned judgment rendered on 23.8.2016 in Crl.A.No.941 of 2008. However the appellate court has also confirmed the sentence of imprisonment till rising of the court but has modified the order to pay compensation by imposing fine of Rs.80,000/- which was disbursable as compensation to the complainant in terms of Sec.357(1)(b) of the Cr.P.C and the default sentence has reduced from six months to one month simple imprisonment. It is these verdicts of the courts below that are under challenge in this revision petition. 3. Initially consolidated notice was issued by this Court on 19.06.2017 on the delay condonation application as well as in the main Crl.R.P. Though the said consolidated notice was duly served on R1 (complainant) there was no appearance for that party. Thereafter this Court had condoned the delay in filing the revision petition subject to payment of cost to the High Court Legal Service Committee as per order dated 2.8.2017. Thereafter this matter came up for admission and this Court had admitted the revision petition on 8.8.2017. Though consolidated notice was earlier duly served on R1, this Court had again ordered notice to R1 returnable within two Crl.R.P.No. 930 of 2017 3 weeks. The Registry has reported that notice was again send to R1 by speed post on 9.8.2017 and further it has been endorsed that the said notice has been duly served on R1 (complainant). However, there is no appearance for the R1 complainant. Public Prosecutor has taken notice for R2, State. Service complete. 4. Heard Sri.Rajesh Vijayan, learned counsel appearing for revision petitioner(accused) and Sri.Jestin Mathew, learned Prosecutor appearing for R2, State. 5. The case set up in the complaint is to the effect that the revision petitioner (accused) owes a total liability of Rs.70,000/- to the complainant company and that in discharge of the said liability, the accused had voluntarily executed and issued Ext.P6 cheque dated 30.11.2005 for Rs.70,000/- drawn from his account and payable in favour of the complainant company. The cheque when presented resulted in dishonour as per Ext.P8 and P9 bank memos on the ground of insufficiency of funds. The complainant had issued Ext.P10 statutory demand notice under Sec. 138 proviso (b) of the NI Act, calling upon the accused to pay off the amounts covered Crl.R.P.No. 930 of 2017 4 by the cheque within a period of 15 days from the date of receipt of the said notice. The said notice send by registered post has been duly served on the accused as per Exts. P11 and P12 and the accused had issued a reply notice on 8.02.2006 denying the liability. Since the amount was not paid the complainant, after adhering to the procedural formalities, has instituted the above complaint which resulted in the trial. During the trial, the power of attorney holder of the complainant company has been examined as PW1 and has marked Exts. P1 to P12 documents. The defence has marked Ext.D1 reply notice dated 8.02.2006. Defence has not adduced any oral evidence. 6. The complaint is conspicuously silent about the nature of the transaction and nature of the details listing all the alleged liability in question. The plain and simple case put forward in the complaint is to the effect that the accused owes a total amount of Rs.70,000/- to the complainant company and that for discharging the said liability Ext.P6 cheque for the said amount was issued by him which resulted in dishonour etc. It is in the proof affidavit filed in lieu of the chief examination that PW1 would state that the transaction arose from a hire purchase agreement executed as Ext.P5 dated 31.10.2003 which is executed by the complainant company (which is said to be engaged in the business of hire Crl.R.P.No. 930 of 2017 5 purchase of vehicles etc.) with one Sri. Siljo Peter, the son of the accused and that the accused was the surety in the said transaction entered into by his son with the complainant and that the accused had voluntarily come forward and executed Ext.P6 cheque for discharging the liability owed by his son to the complainant company in the hire purchase transaction etc. On a perusal of the impugned judgment and the evidence on record, this Court is of the considered opinion that both the courts below have totally overlooked crucial and relevant aspects of the matter and that such omission to take into consideration such relevant aspects of the matter, would amount to illegality and perversity in the rendering of the impugned judgments. In the light of these aspects, this Court is of the considered opinion that the accused is entitled for the benefit of acquittal in the instant case due to the following reasons. (A). It is not in dispute that the complaint in question has been filed for the complainant company through PW1, the power of attorney holder of the said company. The only person who has adduced evidence on behalf of the complainant company is PW1 (power of attorney holder). There are no averments anywhere in the complaint that PW1 (power of attorney holder) has direct knowledge about the transaction in question, especially regarding the execution of the hire purchase agreement and more particularly Crl.R.P.No. 930 of 2017 6 about the voluntary execution and issuance of the cheque said to have been made by the accused who is stated to be the surety of his son. Still further there is no assertion by PW1 anywhere in the chief examination or in the cross examination that he had direct knowledge about these transactions and that he has witnessed the alleged execution and issuance of the cheque. The Apex Court in the celebrated judgment in **A.C.Narayanan v. State of Maharashtra** reported in **(2014)11 SCC 790 = 2013(4) KLT 21(SC)** has held that though a complainant could be permitted to prosecute his complaint through a power of attorney holder, an explicit assertion as to the knowledge of the power of attorney holder about the transactions in question must be clearly and cogently specified in the complaint. Though the filing of a complaint under Section 142 of the Negotiable Instruments Act by the power of attorney holder is perfectly legal the said power of attorney holder should assert in the complaint that he has direct knowledge about the transaction in question and further that he should clearly depose in evidence that he has witnessed the transactions in question etc. It is further held that any power of attorney holder, who does not fulfil these conditions and who has no direct knowledge regarding transaction cannot give evidence on behalf of the complainant, even if he is styled as power of attorney holder. Crl.R.P.No. 930 of 2017 7 The legal position in this regard has again reiterated by the Apex Court in the judgment in **Narayanan.A.C and another v. State of Maharashtra and others** reported in **AIR 2015 SC 1198 = 2015(1) KLT 217(SC).** It has been held therein that where a company is a complainant, the Managing Director or the Executive Director are authorized to appoint or nominate any other person to appear on their behalf. Then, when the official of the company files a complaint on behalf of the complainant company, he should definitely know everything about the transaction in question and the said official must be specifically authorized by the Managing Director or the Director of the company to proceed with the complaint etc. In the instant case other than reciting in the complaint that the complaint is filed by the power of attorney holder, there are no assertion either in the complaint or in the proof affidavit or in cross examination that PW1 has any direct knowledge about the hire purchase transaction in question said to have been entered into by the son of the accused and the complainant company and more crucially about the factual aspects regarding the alleged voluntary execution and issuance of the cheque by the accused. Since there are no such assertions in the complaint, the complaint itself could not have been legally permitted to proceed with. Since PW1 has not given any version even in the chief examination or cross Crl.R.P.No. 930 of 2017 8 examination of PW1 that he has direct knowledge about the transaction in question, it is only to be held that the evidence given by PW1 on behalf of the complainant company cannot be acted upon for rendering the judgment of conviction against the accused in the facts and circumstances of this case. (B). Immediately after getting Ext.P10 statutory demand notice dated 28.01.2006, the accused had issued Ext.D1 reply notice dated 8.2.2006 to the complainant. In the said reply notice the accused has taken up a specific case that he does not owe any money to the complainant company and that hire purchase agreement was entered into by his son and the complainant company on 13.11.2003 and that his son had made two remittances as on 14.11.2003 and 14.12.2003 and that later he had sold the vehicle to one Sri. Mohan, son of Prabhakaran on 15.12.2003 and the said factum of sale was duly intimated to the complainant company and that the complainant company had never objected to such sale and that as per the conditions in the said sale, the entire liability in respect of hire purchase agreement was solely with the new purchaser, the above said Sri.Mohan etc. Further it is also clearly asserted in Ext.D1 notice that at the time of the commencement of hire purchase agreement, the complainant company had insisted that the petitioner’s blank signed cheque Crl.R.P.No. 930 of 2017 9 should be given as security for the transactions of his son and Ext.P6 cheque and another cheque was given as blank signed cheques as security to the complainant company at the time of the initial commencement of the transaction in question and that one of the said cheque (Ext.P6) has been misused by presenting the same in the instant complaint etc. The averments in the complaint was conspicuously absent about the contents of the above said reply notice. The said reply notice has not even been produced along with the complaint. There is only a vague averment in the complaint that the reply notice was issued by the accused raising false contentions etc. That apart, it can be seen that the only averment in the complaint regarding the transaction is only to the effect that the accused owes a total amount of Rs.70,000/- to the complainant Bank and that in discharge of the said liability the accused had issued the present cheque etc. The nature of the transactions, the details of the hire purchase agreement, the interest agreed upon between the parties, the amounts paid by the hirer, the manner in which the liability amount has been quantified so as to justify the amount covered by the dishonoured cheque etc, the date on which Ext.P6 cheque was handed over by the accused to the complainant company etc. are conspicuously silent in the complaint. This Court in the decision in **K.K.Divakaran** v **. State of** Crl.R.P.No. 930 of 2017 10 **Kerala** reported in **2016(4) KLT 233** has clearly held that in a criminal case, the accused should be definitely informed before the trial not only of the nature of the offence but also the material particulars of the transactions which are necessary for him to effectively meet and rebut the allegations raised against him. That unscrupulous complainants refuse to do so with the object of denying the accused a fair trial, which is a constitutional fundamental right guaranteed under Article 21 of the Constitution of India. An accused in a complaint filed under Section 142 of the NI Act is also entitled to know before the trial the material particulars of the accusations and allegations raised against him and suppression of such material particulars in the complaint alone is sufficient to order his acquittal. It will be profitable to refer paras 18 and 20 of the above said decision of this Court reported in ## K.K.Divakaran's case (supra) which reads as follows: _“ 18. Before she filed the complaint the second respondent sent Ext.P4 statutory notice to the revision petitioner informing him about the dishonour of the cheque and demanding payment of the amount covered by it. Neither the nature, nor the date of the transaction between the parties nor the date of issuance of the cheque was disclosed in it. There was only a bald statement that the revision petitioner issued a cheque bearing the date 11.1.1999 for Rs.2,55,000/- in discharge of a debt. There is no explanation why these material facts were not disclosed in the statutory notice. Suppression of material facts relating to the alleged transaction in the notice issued before filing the suit or the complaint is an artifice used by certain litigants, the intention of which is very clear. They want to develop a story after knowing the defence that may be set up by the opposite party. The doors of the court should be closed to such fortune seekers._ _20. In a criminal case the accused should be informed before_ Crl.R.P.No. 930 of 2017 11 _the trial not only of the nature of the offence but also the particulars of the transaction which are necessary for him to effectively meet the case against him. But unscrupulous complainants refuse to do so with the object of denying the accused a fair trial, which is a right guaranteed under Article 21 of the Constitution. An accused in a complaint case filed under Section 142 of the Act also is entitled to know before the trial the particulars of the accusation against him. Suppression of these particulars in the complaint alone is sufficient to order his acquittal.”_ (C). In the light of the above said aspects, it is only to be held that suppression of the said crucial aspects in the complaint should lead to the acquittal of the accused in the instant case. Serious prejudice has been caused to the accused due to such suppression. In the complaint the case projected is as if the transaction was directly between the accused and the complainant. It is in the proof affidavit that the PW1 would for the first time projected an entirely different case that the transactions was a hire purchase agreement entered into by the son of the accused and the complainant company and that the accused had stood as surety to his son in the said transaction. Therefore suppression of such crucial aspects in the complaint should be very seriously viewed as it hampers the right of the accused to face a fair trial and it causes serious prejudice to the accused in view of the crucial suppression. (D). The complaint is conspicuously silent about the agreed interest that is chargeable in terms of the hire purchase agreement. The complaint is also lacking the necessary details as to how the complainant company has arrived at the figure of Rs.70,000/- which Crl.R.P.No. 930 of 2017 12 is covered by the instant cheque. PW1 in his evidence would only say that the total outstanding liability of the son of the accused at the relevant time was Rs.2,46,165/- and that he had paid an amount of Rs.1,57,450/- on 30.11.2005 and that accused had issued Ext.P6 cheque dated 30.11.2005 for Rs.70,000/-. How the figure of Rs.2,46,165/- has been arrived at and as to how the figure of Rs.70,000/- is arrived at, cannot be understood by anyone going through the evidence of PW1. If as a matter of fact, Rs.2,46,165/was the liability along with the agreed interest and Rs.1,57,450/has been paid, then the balance amount even going by the version of the complainant would come to Rs.80,715/- whereas Ext.P6 cheque is only for Rs.70,000/-. Whether the entire transactions has been settled by taking such a reduced amount etc. are not clear in any manner from the evidence of PW1. More particularly, it is bounden obligation of the complainant to adduce convincing and cogent evidence before the criminal court so as to establish as to what exactly was the agreed interest and the total amount paid by the accused and as to how the liability figure is arrived at so as to justify the figure shown in the dishonoured cheque etc. Since none of such cogent and relevant aspects are borne out from the evidence of PW1, it is only to be held that it will be highly unsafe to rest a conviction against the accused on the basis of such weak and ## Crl.R.P.No. 930 of 2017 13 feeble evidence adduced by the complainant. For all these reasons, this Court is of the considered opinion that both the courts below have clearly and egregiously erred in not taking into account such crucial and relevant aspects of the matter. If these relevant and crucial aspects had been taken into consideration in its correct perspective, then the inevitable outcome would have been that the accused is entitled for the benefit of acquittal. In the light of these aspects, this Court is constrained to hold that the rendering of the judgment by both the courts below are vitiated by gross illegality and perversity. Accordingly, the impugned judgments of both the courts below in the instant case are set aside and the accused is acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act and he is set at liberty. The petitioner should produce a certified copy of this order before the trial court for necessary information. With these observations and directions this Criminal Revision Petition stands finally disposed of. Sd/- ## **ALEXANDER THOMAS JUDGE** //True Copy\\ P.A to Judge IAP