Jolly Paul v Jamia Hassania Public School and Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.HARIPRASAD TUESDAY, THE 18TH DAY OF FEBRUARY 2014/29TH MAGHA, 1935 CRL.A.No. 2300 of 2008 ( ) --------------------------- CRA 285/2007 of ADDITIONAL SESSIONS COURT (ADHOC-I), ERNAKULAM CC NO.892/2001 OF JUDICIAL FIRST CLASS MAGISTRATE, PERUMBAVOOR APPELLANT(S)/IST RESPONDENT/COMPLAINANT: ------------------------------------------------------------------------- JOLLY PAUL, CHAKKALAKKAL HOUSE, ALLAPRA P.O., PERUMBAVOOR. BY ADV. SRI.MATHEW KURIAKOSE RESPONDENT(S)/APPELLANTS & STATE/ACCUSED NOS 1,2 & 4 & STATE: -------------------------------------------------------------------------------------------------------------- 1. M/S.JAMIA HASSANIA PUBLIC SCHOOL, REGD.NO.E.R.260/1979, REPRESENTED BY ITS SECRETARY BADARUL HUDA MASJID BUILDING, THOTTAKKATTUKARA, ALUVA. - 2. C.K.ABDUL RAHIMAN HAJEE, TREASURER, M/S.JAMIA HASSANIA PUBLIC SCHOOL, S/O.KOMU HAJEE CHIRAMURIYIL HOUSE, KUNJUNIKKARA, ALUVA. (DIED) - ** 3. MOULAVI MUHAMMED NOOH, SECRETARY, M/S.JAMIA HASSANIA PUBLIC SCHOOL, S/O.MUHAMMED SALIH SUROOR MANZIL, VELIYATHUNADU KARA, U.C.COLLEGE P.O. (DIED) 4. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. - *APPEAL IS ABATED WITH RESPECT TO R2 VIDE ORDER DATED 27.3.2013 IN CRL.APPEAL NO.2300/2008 **APPEAL AS AGAINST THE 3RD RESPONDENT IS ABATED VIDE ORDER DATED 12.8.2013 IN CRL.APPEAL NO.2300/2008. R1, R2 & R3 BY ADV. SRI.V.K.VEERAVUNNY BY PUBLIC PROSECUTOR SHRI K.K.RAJEEV THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 18-02-2014, ALONG WITH CRA. 2301/2008 AND CRA. 2302/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **A.HARIPRASAD, J.** ## **-------------------------------------Crl.Appeal Nos.2300, 2301 & 2302 of 2008 -------------------------------------Dated this the 18[th] day of February, 2014.** ## **JUDGMENT** Appeals filed under Section 378(4) of the Code of Criminal Procedure (for short, “Cr.P.C.”). 2. Crl.Appeal No.2300 of 2008 is taken as the leading case. Parties are referred to as mentioned in C.C.No.892 of 2001 on the file of Judicial First Class Magistrate Court, Perumbavoor. 3. All these appeals are filed by the complainants who approached the trial court with complaints under Section 138 of the Negotiable Instruments Act, 1881 (for short, “the Act”). Complainants in these cases are different persons; but the accused are the same. Trial court after considering the evidence convicted all the accused persons except the 3[rd] accused in the leading case. 4. Brief facts, relevant for our purpose, are as follows: 1[st] accused is a society registered under the TravancoreCochin Literary, Scientific and Charitable Societies Registration Act, 1955. 2[nd] accused is the Treasurer of the society. Absconding 3[rd] accused is the Manager of the society. 4[th] accused is the Secretary of the society. Complainants in each case contended that accused 2 to 4, for and on Crl.Appeal Nos.2300, 2301 & 2302/2008 2 behalf of the 1st accused society, borrowed various amounts for running the institutions managed by the society. In discharge of that liability, cheques were issued to the complainants promising that the amounts could be collected by presentment of the cheques. When the cheques were presented, they were dishonoured due to insufficiency of funds. After sending statutory notices, complaints were filed. The complainants testified before the court below and documents were produced. In all the cases, defence evidence was also let in. 5. Trial court convicted all the accused except the 3[rd] accused who was absconding. The accused persons challenged the conviction and sentence before the court of Additional Sessions Judge (Adhoc-I), Ernakulam. Learned Additional Sessions Judge allowed the appeals and set aside the conviction and sentence of the accused. Hence these appeals. 6. Heard the learned counsel for the appellants. Though the accused persons were served, there was no representation for them at the time of hearing. I have carefully perused the records. 7. It is borne out from the records that accused 2 and 4 in C.C.No.892 of 2001 (who are the respondents 2 and 3 in the leading case) had expired during the pendency of the appeals. Therefore, what is surviving is the case against the 1[st] accused only as the 3[rd] accused is absconding. The case of complainants is that accused 2 to 4 together 3 Crl.Appeal Nos.2300, 2301 & 2302/2008 borrowed money for running of the institutions owned and managed by the society. The questions of law arising in all these appeals are the same. Trial court convicted accused 1, 2 and 4 for an offence under Section 138 of the Act believing the evidence adduced by the complainants in the respective cases. The case of complainants is that accused 2 to 4 approached them requesting financial help to run the institutions under the control of the 1[st] accused society. It appears that the contesting accused took up a plea that the absconding 3[rd] accused was not authorised to open an account on behalf of the society, to borrow money on behalf of the society and to issue cheques in discharge of those liabilities. Trial court considered this issue and believed the evidence of PWs 1 and 2 in the leading case to find that the contesting accused were guilty of the offence. To buttress the defence case, bye-law of the 1[st] accused society was produced. Lower appellate court relying on Clause 15(c) of Ext.D1 bye-law found that the absconding 3[rd] accused was not authorised to open an account and borrow money on behalf of the 1[st] accused society. Learned counsel for the appellant contended that the evidence of DW1 coupled with Ext.D1 would show that Ext.D1 bye-law was subsequently amended. It is also come out in evidence that though Ext.D1 bye-law authorised the committee to open an account in the State Bank of Travancore, Aluva Branch, they have opened an account in the South Indian Bank as per the testimony of DW1 in C.C.No.896 of 2001. DW1 in that case feigned 4 Crl.Appeal Nos.2300, 2301 & 2302/2008 ignorance whether the accused were authorised to open an account in the Catholic Syrian Bank. PW2 in the leading case, who is the bank manager and in whose bank Ext.P1 was drawn, deposed that accused 2 to 4 approached the bank to open an account in the name of the 1[st] accused society. There is no reason to disbelieve the testimony of PW2 in the leading case. Similarly evidence adduced in all other cases would show that the accounts were opened for and on behalf of the 1[st] accused society in banks and the disputed cheques were drawn by the accused in the name of the society from those accounts. There is no dispute regarding the compliance of statutory requirements before institution of the complaints. 8. Another contention raised by the contesting accused is that the absconding 3[rd] accused who functioned as the Manager of the society was removed from the affairs of the society. It is come out in evidence of DW1 in C.C.No.896 of 2001 that he was removed only in the year 2001. Ext.P6 in the leading case is the certified copy of the plaint in O.S.No.131 of 2000 filed before the Munsiff Court, Perumbavoor. In that case, the absconding 3[rd] accused is the 3[rd] plaintiff. Learned counsel for the appellant argued that Ext.P6 in the leading case would show that the absconding 3[rd] accused was functioning as the Manager and this fact is admitted by other accused. The lower appellate court did not attach due weight to this document to find that the absconding 3[rd] accused was acting Crl.Appeal Nos.2300, 2301 & 2302/2008 5 for and on behalf of the 1[st] accused society and issued the disputed cheque, contended the learned counsel for the appellants. On going through the evidence, I am satisfied that the absconding 3[rd] accused in the leading case was functioning as the Manager at the material time and he issued the cheques for and on behalf of the society. Ext.D1 bye-law also shows the powers and duties of the Manager. Further, Ext.D1 shows the name of the absconding 3[rd] accused as the Manager of the society. Fact that he functioned as Manager of the society is not disputed by the contesting accused. Then, it is for them to establish that the Manager (absconding 3[rd] accused) was removed from the managership with effect from a particular date and the dealings made by him did not bind the society. A decision rendered by the Supreme Court in **N.Rangachari v. Bharat Sanchar Nigam Ltd. ((2007) 5 SCC 108)** is pressed into service by the learned counsel for the appellant to canvass the following proposition of law: _“A person normally having business or commercial dealings with a company, would satisfy himself about its creditworthiness and reliability by looking at its promoters and Board of Directors and the nature and extent of its business and its Memorandum or Articles of Association. Other than that, he may not be aware of the arrangements within the company in regard to its management, daily routine, etc. Therefore, when a cheque issued_ 6 Crl.Appeal Nos.2300, 2301 & 2302/2008 _to him by the company is dishonoured, he is expected only to be aware generally of who are in charge of the affairs of the company. It is not reasonable to expect him to know whether the person who signed the cheque was instructed to do so or whether he has been deprived of his authority to do so when he actually signed the cheque. Those are matters peculiarly within the knowledge of the company and those in charge of it. So, all that a payee of a cheque that is dishonoured can be expected to allege is that the persons named in the complaint are in charge of its affairs. The Directors are prima facie in that position.”_ Considering the facts and circumstances of the case, I find that reversal of the conviction entered by the trial court at the hands of the lower appellate court was not legally justified. However, I will have to keep in mind the fact that the contesting accused (respondents 2 and 3 in the leading case) had expired during the pendency of the appeals. Therefore, the conviction and sentence imposed by the trial court will have to be suitably modified considering the subsequent events. In the result, i. Crl.Appeal No.2300 of 2008 is allowed. The impugned judgment of the lower appellate court in Crl.Appeal No.285 of 2007 of Additional Sessions Judge (Adhoc-I), Ernakulam is hereby set aside. 1[st] respondent/1[st] accused society is convicted under Section 138 of the 7 Crl.Appeal Nos.2300, 2301 & 2302/2008 Negotiable Instruments Act, 1881. It shall pay fine of `5,000/- (Rupees five thousand only) failing which, it will be recovered under the provisions of the Cr.P.C. If fine is recovered, it shall be paid to the complainant under Section 357(1) Cr.P.C. As respondents 2 and 3/accused 2 and 4 in this case died pending the proceedings, so their conviction and sentence will stand abated. ii. Crl.Appeal No.2301 of 2008 is allowed. The impugned judgment of the lower appellate court in Crl.Appeal No.283 of 2007 of Additional Sessions Judge (Adhoc-I), Ernakulam is hereby set aside. 1[st] respondent/1[st] accused society is convicted under Section 138 of the Negotiable Instruments Act, 1881. It shall pay fine of `5,000/- (Rupees five thousand only) failing which, it will be recovered under the provisions of the Cr.P.C. If fine is recovered, it shall be paid to the complainant under Section 357(1) Cr.P.C. As respondents 2 and 3/accused 3 and 4 in this case died pending the proceedings, so their conviction and sentence will stand abated. iii. Crl.Appeal No.2302 of 2008 is allowed. The impugned judgment of the lower appellate court in Crl.Appeal No.284 of 2007 of Additional Sessions Judge (Adhoc-I), Ernakulam is hereby set aside. 1[st] respondent/1[st] accused society is convicted under Section 138 of the Negotiable Instruments Act, 1881. It shall pay fine of `5,000/- (Rupees five thousand only) failing which, it will be recovered under the provisions of Crl.Appeal Nos.2300, 2301 & 2302/2008 8 the Cr.P.C. If fine is recovered, it shall be paid to the complainant under Section 357(1) Cr.P.C. As respondents 2 and 3/accused 2 and 4 in this case died pending the proceedings, so their conviction and sentence will stand abated. iv. Records in all the cases shall be sent back to the trial court for expediting trial in respect of the absconding accused. ## **A. HARIPRASAD, JUDGE.** **cks**