GOPALAN C. S/O KEERAN v. DR JOSEPH CHEERAN and STATE OF KERALA

## _`IN THE HIGH COURT OF KERALA AT ERNAKULAM`_ ## _`PRESENT`_ ## _`THE HONOURABLE MRS. JUSTICE SOPHY THOMAS`_ ``` MONDAY, THE 11[TH] DAY OF DECEMBER 2023 / 20TH AGRAHAYANA, 1945 ``` ## _`CRL.REV.PET NO. 3498 OF 2005`_ ``` AGAINST THE JUDGMENT DATED 21.04.2004 IN CC 23/2004 OF SPECIAL JUDICIAL FIRST CLASS MAGISTRATE COURT ( MARAD CASES), KOZHIKODE AN THE JUDGMENT IN CRA 322/2004 ``` ``` DATED 09.11.2005 OF THE COURT OF SESSIONS, KOZHIKODE ``` ## _`REVISION PETITIONER/APPELLANT/ACCUSED:`_ ``` GOPALAN.C. S/O KEERAN, AGED 51 YEARS, DRIVER, SUPERINTENDENT OFFICE, POST AND TELEGRAPH DEPARTMENT, K.S.R.T.C. LANE, KUNNAMANGALAM AMSOM,, KARATHUR DESOM, KALLAI P.O. KOZHIKODE, PRESENTLY RESIDING AT, QUARTER NO.B4/551, P&T QUARTERS, NALLALAM P.O.,, CALICUT. BY ADV SRI.SAJITH KUMAR V. ``` ## _`RESPONDENTS/RESPONDENT/COMPLAINANT:`_ ``` 1DR.JOSEPH CHEERAN AGED 55 YEARS, G.NIVAS, 33/101,, NEAR MASS CORNER, MALAPARAMBA, KOZHIKODE. 2STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR,, HIGH COURT OF KERALA, ERNAKULAM. BY ADV SRI.SUNNY MATHEW ``` ## _`OTHER PRESENT:`_ ``` SR.P.P.- SRI. RENJIT GEORGE ``` ``` THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 11.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` Crl.R.P. No. 3498 of 2005 ``` ``` ..2.. ``` ## **SOPHY THOMAS, J.** ## **=====================** Crl. Revision Petition No. 3498 of 2005 **========================** ## _**O R D E R**_ ## **Dated this the 11[th] day of December, 2023** This revision is at the instance of the accused in C.C.No.23 of 2004 on the file of Special Judicial First Class Magistrate's Court (Marad Cases), Kozhikode, assailing the judgment in Crl.Appeal No.322 of 2004 on the file of Additional Sessions Judge-I, Kozhikode, which upheld his conviction under Section 138 of the Negotiable Instruments Act (hereinafter referred as ‘the NI Act’), though the sentence was modified and reduced to certain extent. 2. C.C. No. 23 of 2004 was arising out of a complaint filed by the 1[st] respondent herein against the revision petitioner under Section 138 of the NI Act. The allegation in the complaint was ``` Crl.R.P. No. 3498 of 2005 ``` **==> picture [31 x 7] intentionally omitted <==** that, the revision petitioner borrowed Rs.95,000/- from the 1[st] respondent/complainant in April 2001, agreeing to repay the amount within four months. He failed to repay the amount as agreed. As the complainant met with an accident and was laid up, he could not demand the amount in time, after it was being defaulted. He approached the revision petitioner in the year 2003, demanding the amount, and then, he issued Ext.P1 cheque dated 10.10.2003, and requested him to present it before Bank after a month. The 1[st] respondent/complainant presented the cheque for collection on 12.11.2003 and on the same day, it was dishonoured as per Ext.P2 memo dated 12.11.2003. He sent lawyer notice on 26.11.2003 intimating dishonour of the cheque and demanding the cheque amount, as evidenced by Exts.P3 and P3(a). The revision petitioner received the notice on 12.12.2003 as per Ext.P3(b) acknowledgment card. Though the revision petitioner sent Ext.P4 reply notice, the amount was not returned, and hence the complaint. ``` Crl.R.P. No. 3498 of 2005 ``` ``` ..4.. ``` 3. On appearance of the revision petitioner before the trial court, particulars of offence was read over and explained, to which, he pleaded not guilty and claimed to be tried. Thereupon, PW.1 was examined and Exts.P1 to P4 were marked from the side of the 1[st] respondent/complainant, to prove his case. 4. On closure of complainant’s evidence, the revision petitioner was questioned under Section 313 of Cr.P.C. He denied all the incriminating circumstances brought on record, and he himself was examined as DW1. 5. On an anxious consideration of the rival contentions and on analysing the facts and evidence, the trial court found the revision petitioner guilty under Section 138 of the NI Act and he was sentenced to undergo simple imprisonment for six months and to pay compensation of Rs.95,000/- to the complainant under Section 357(3) of Cr.P.C. 6. Aggrieved by the conviction and sentence, the revision petitioner preferred Crl.Appeal No. 322 of 2004. The appellate ``` Crl.R.P. No. 3498 of 2005 ``` **==> picture [31 x 7] intentionally omitted <==** court, on re-appreciation of the facts and evidence, found that there was no reason to interfere with the conviction, but the sentence was modified and reduced to imprisonment till rising of court, and compensation of Rs.95,000/- with a default sentence of simple imprisonment for four months. Impugning the appellate court judgment, he has preferred this revision. 7. Now this Court is called upon to verify the legality, propriety and correctness of the conviction and sentence imposed on the revision petitioner, by the courts below. 8. When this revision was taken up for consideration on 01.11.2003, learned counsel for the revision petitioner submitted that, the revision petitioner is no more, and the whereabouts of his legal representatives are not known. On direction, a report was obtained from the Station House Officer of Chevayur Police Station, and it was reported that the revision petitioner passed away on 07.05.2022 and the details of his legal representatives, with their contact numbers were also furnished in that report. ``` Crl.R.P. No. 3498 of 2005 ``` **==> picture [31 x 7] intentionally omitted <==** Learned counsel for the revision petitioner was directed to take steps to implead the legal representatives of the deceased revision petitioner, but the learned counsel submitted that, though he contacted them, they were not responding. Since the sentence includes compensation amount of Rs.95,000/-, that part of the sentence will not get abated, even if the revision petitioner is no more. So, learned counsel for the revision petitioner sought permission to argue the matter on merit, and it was allowed. 9. The Registry reported that the LCR in this case is not available, though it was called for from the lower court. Learned Special Judicial First Class Magistrate (Marad Cases), Kozhikode informed this Court that the case records in C.C .No. 23 of 2004 were forwarded to this Court in the year 2006 itself. But, on verification, the Registry reported that, no such records were received, and the despatch details were not furnished by the lower court. The C.C. is of the year 2004. It will be a futile exercise, even if this Court proceeds to take action against the ``` Crl.R.P. No. 3498 of 2005 ``` ``` ..7.. ``` persons responsible for keeping the files, as twenty years passed in between. Learned counsel for the revision petitioner as well as the 1[st] respondent/complainant assisted the court, with the copy of records available with them, for the purpose of disposal of this revision petition. 10. Heard learned counsel for the revision petitioner, and learned Public Prosecutor. 11. The revision petitioner is not disputing his signature in Ext.P1 cheque. It is admitted that the said cheque was drawn from a bank account maintained by him with Union Bank of India, Palayam Road Branch, Kozhikode. It is also not disputed that, the said cheque on presentation before the bank was dishonoured for the reason ‘insufficient funds’. Ext.P3 lawyer notice and Ext.P3(a) postal receipt will show that, on dishonour of the cheque, the 1[st] respondent/complainant sent the statutory notice within time, and Ext.P3(b) acknowledgment card shows receipt of that notice by the revision petitioner. So, the ``` Crl.R.P. No. 3498 of 2005 ``` ``` ..8.. ``` statutory requirements under Section 138 of the NI Act has been properly complied with by the 1[st ] respondent/complainant. 12. The case put forward by the revision petitioner is that, the amount borrowed by him was only Rs.25,000/-, and as a security for that amount, he had given three signed blank cheques to the 1[st] respondent/complainant. He repaid that amount with interest, within six months. But the blank cheques given as security were not returned. According to him, misusing one of those cheques, the 1[st] respondent/complainant filed the complaint. 13. In Ext.P4 reply notice as well as in his testimony before court the revision petitioner repeated that story. But, no scrap of paper has been produced by him, to show that the amount borrowed by him was only Rs.25,000/-. There is nothing to show repayment of that amount also. His contention is that, even after repayment of the money borrowed, the 1[st] respondent/complainant was intending to get his property at a ``` Crl.R.P. No. 3498 of 2005 ``` **==> picture [31 x 7] intentionally omitted <==** reduced rate, and since he was not amenable, he misused his cheque and filed a false case against him. That story is not having any factual foundation, and hence, it is only to be rejected. 14. Even according to the revision petitioner, Ext.P1 cheque was issued by him as a security cheque putting his signature only. As we have seen, there is nothing to show that the amount borrowed was only Rs.25,000/- and there is no evidence to prove its repayment also. When the signature in the cheque is admitted, even if it is issued as a blank one, unless there is evidence to prove discharge of that debt, the payee can fill up that cheque and present it before bank. 15. In _**Bir Singh v. Mukesh Kumar**_ [2019 (1) KHC 774: 2019 (4) SCC 197: 2019 (1) KLT 598], the Apex Court held that, when a signed blank cheque is voluntarily given to a payee, towards some payment, the payee may fill up the amount and other particulars, and that will not invalidate the cheque. The onus to rebut the presumption under S.139 of the NI Act that the ``` Crl.R.P. No. 3498 of 2005 ``` **==> picture [37 x 7] intentionally omitted <==** cheque has been issued in discharge of a debt or liability, is on the revision petitioner. Even if a blank cheque leaf is voluntarily signed and handed over by the accused, towards some payment, it would attract the presumption under S.139 of the NI Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. 16. In _**Sripati Singh v. State of Jharkand**_ (2021 SCC Online SC 1002), the Apex Court observed that, if a cheque is issued as a security, and if the debt is not repaid in any other form before the due date or if there is no understanding or agreement between the parties to defer the repayment, the cheque would mature for presentation. 17. Paragraph Nos. 17 and 18 of that judgment reads thus:- _"17. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to_ ``` Crl.R.P. No. 3498 of 2005 ``` ``` ..11.. ``` _which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under S.138 and the other provisions of N.I. Act would flow._ _18. When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are_ ``` Crl.R.P. No. 3498 of 2005 ``` **==> picture [37 x 7] intentionally omitted <==** _only the defences that would be available to the drawer of the cheque in a proceedings initiated under S.138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an 'on demand promissory note' and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation."_ 18 _._ The dictum laid down in _**Sripati Singh’s** case (Supra),_ was reaffirmed by the Apex Court in _**Dashrathbhai Trikambhai**_ _**Patel v. Hitesh Mahendrabhai Patel and Another**_ [2022 (7) KHC 61 SC], and the Apex Court came out with the following principles:- _(i) Where the borrower agrees to repay the loan within a specified timeline and issues a cheque for security but defaults_ ``` Crl.R.P. No. 3498 of 2005 ``` **==> picture [37 x 7] intentionally omitted <==** _in repaying the loan within the timeline, the cheque matures for presentation. When the cheque is sought to be encashed by the debtor and is dishonoured, S.138 of the Act will be attracted;_ _ii) However, the cardinal rule when a cheque is issued for security is that between the date on which the cheque is drawn to the date on which the cheque matures, the loan could be repaid through any other mode. It is only where the loan is not repaid through any other mode within the due date that the cheque would mature for presentation; and_ _(iii) If the loan has been discharged before the due date or if there is an 'altered situation', then the cheque shall not be presented for encashment._ 19. From the available facts and evidence, it has to be held that, the revision petitioner failed to rebut the presumptions available in favour of the 1[st] respondent/complainant under Sections 118 and 139 of the NI Act. So, this Court finds no reason to interfere with the conviction and sentence imposed on the revision petitioner, as per the impugned judgment. 20. In the result, the revision petition is dismissed. Since the revision petitioner is no more, imprisonment till rising of court ordered by the appellate court will get abated. But, ``` Crl.R.P. No. 3498 of 2005 ``` **==> picture [37 x 7] intentionally omitted <==** regarding the compensation part (Rs.95,000/-), the trial court has to execute the sentence by proceeding against the assets, if any, left by the revision petitioner, now held by his legal representatives. 21. Registry of this Court is directed to transmit the case records forthwith to the trial court for executing the compensation part of the sentence imposed by the appellate court, against the assets, if any, left by the revision petitioner, without further delay. The revision petition accordingly stands dismissed. **Sd/-** ## **SOPHY THOMAS** **JUDGE** RMV ``` TRUE COPY ``` ``` P.A.TO JUDGE ```