Juliyan Justin v. Joseph Albi and State

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE A.HARIPRASAD** ## **TUESDAY, THE 25TH DAY OF MARCH 2014/4TH CHAITHRA, 1936** **CRL.A.No. 1201 of 2002 ( ) ---------------------------** **AGAINST THE ORDER/JUDGMENT IN CRA 368/1996 of IST ADDITIONAL SESSIONS COURT, TRIVANDRUM DATED 05-12-2001.** **APPELLANT(S)/1ST RESPONDENT/COMPLAINANT::** **----------------------------------------** **JULIYAN JUSTIN, PANIVILAKAM VEEDU, PULINTHURUTHY.** **BY ADV. SRI.BINDU R SASTHAMANGALAM.** **RESPONDENT(S)/APPELLANT/ACCUSED AND STATE::** **-------------------------------------------** **1. JOSEPH ALBI, ANANDAVILASOM PUTHEN VEEDU, THEKKE ARYATHURUTHY, SARKARA, CHERAYINKEEZH.** **2. STATE, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **R1 BY ADV. C.K.KHALID** **R2 BY PUBLIC PROSECUTOR K.K.RAJEEV.** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 25-03-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **amk** ## **A.HARIPRASAD, J.** ## **------------------------------------------------** ## **Crl. Appeal No.1201 of 2002 -----------------------------------------------Dated this the 25[th] day of March, 2014.** ## **J U D G M E N T** Appeal filed under Section 378(4) Cr.P.C. Appellant is aggrieved by the dismissal of a complaint filed by him under Section 138 of the Negotiable Instruments Act, 1881 (in short 'the N.I Act') and acquittal of the accused by the lower appellate court, reversing the finding of the trial court. 2. Facts in brief are as follows : On 26-08-1994, the accused borrowed a sum of Rs.50,000/- from the complainant and in discharge of that liability, he issued Ext.P1 cheque drawn on his banker. It is contended that there was an understanding that the cheque would be presented for collection on or after the date shown on it. Learned counsel for the complainant would contend that he did not present the cheque for payment on 26-12-1994, the date shown on the cheque, as the accused sought more time. On 12-05-1995, the cheque was dishonoured with an endorsement ## **Crl. Appeal No.1201 of 2002 2** that the account in the name of the appellant was closed on 01-10-1994. Ext.P3 is the memo of dishonour. Thereafter, a legal notice was issued by the complainant to the accused, which is marked as Ext.P4. Accused received the notice vide Ext.P5 acknowledgement. But no payment was made and hence the complaint was lodged. 3. Learned Magistrate examined two witnesses on the side of the complainant and marked five documents. DW1 was examined and Ext.D1 was marked on the side of the defence. 4. Heard the learned counsel for the complainant, learned counsel for the accused and the learned Public Prosecutor. 5. Learned Additional Sessions Judge reversed the finding of the trial court for the sole reason that the post dated cheque issued by the accused on 26-08-1994, bearing a date 26-12-1994, became a negotiable instrument only on the date ## **Crl. Appeal No.1201 of 2002 3** shown on its face. It was also found that before the date of the cheque, it cannot be legally called a cheque. Lower appellate court found that it is evident from the records that on 01-10-1994, the account maintained by the accused had been closed. So the court below found that it could not be said that Ext.P1 cheque was drawn on the account maintained by the appellant with the bank. On that reasoning, the court below reversed the finding of the trial court. Lower appellate court considered the decision in _**N.E.P.C.Micon Ltd. and others v. Magma Leasing Ltd. (III 1999 CCR 4 S.C).**_ 6. Learned counsel for the complainant contended that the lower appellate court legally went wrong in dismissing the complaint and acquitting the accused as it misapplied the law on the point. Facts and circumstances borne out from evidence in this case would show no dispute regarding the borrowal and issuance of Ext.P1 cheque in discharge of that liability. Further, ## **Crl. Appeal No.1201 of 2002 4** there is no dispute regarding the issuance of statutory notice and receipt of the notice by the accused. It is also an undisputed fact that in spite of the receipt of the notice, the amount was not repaid. Therefore, the only question that is surviving for consideration is whether the closure of account before the cheque coming up for collection would attract an offence under Section 138 of N.I Act ? 6. Learned counsel for the appellant/complainant placed reliance on a Division Bench decision rendered by this court in _**Vathsan v. Japahari (2003(3) K.L.T 972)**_ . The decision referred to by the lower appellate court namely _**N.E.P.C.Micon Ltd. and others**_ (supra) was also considered by the Division Bench. The ratio of the decision reads as follows : _“ When a person draws a cheque, he will believe that the cheque will, in no case, be dishonoured. Therefore, such a defence is not allowed as per S.140 of the Act._ ## **Crl. Appeal No.1201 of 2002 5** _Therefore, we are of the view that once a person had issued a cheque drawn on an account, which he was holding in the bank, necessarily, he cannot take up a defence that he did not have a subsisting account on the date of drawal of the cheque. It will, if permitted, undoubtedly, defeat the intent behind S.140 of the Act. Situations where cheques have been issued against the an account, which has been closed prior to the date of drawal of the cheque, shall also come within the fold of S.138 of the Act to attract criminal liability.”_ 7. Subsequently, the said decision was followed by a learned Single Judge of this court in _**Salim v. Thomas ( 2004(1) K.L.T 816)**_ . Hence, it is clear, considering the statement of law in Sections 138 and 140 of N.I Act, that it can only be said that when a person draws a cheque, he will believe that the cheque will in no case be dishonoured. Since the lower appellate court ## **Crl. Appeal No.1201 of 2002 6** wrongly applied the principles of law, I find that the finding of the court below is not correct and it deserves to be interfered with. Hence, I set aside the finding of the lower appellate court and restore the finding of the trial court. The accused is guilty of an offence under Section 138 of N.I Act. 8. Learned counsel for the complainant contended that the cheque was of the year 1994 and he requested that reasonable amount of interest also may be awarded while granting compensation. Learned counsel for the appellant relied on a decision of the Supreme Court in _**Vijayan v. Baby (2011**_ _**(4) KLT 355)**_ wherein it has been observed as follows: _“In those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant, as invariably, by the time the criminal case is decided, the limitation for filing civil cases would have expired. As the provisions of Chapter XVII of the Act strongly_ ## **Crl. Appeal No.1201 of 2002 7** _lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.”_ 9. The view taken by the Supreme Court in _**Hari Singh**_ ## **Crl. Appeal No.1201 of 2002 8** _**v. Sukhbir Singh ((1988) 4 SCC 551)**_ has been reiterated in _**R.Mohan v. A.K.Vijayakumar ((2012) 8 SCC 721)** ._ The dictum reads as follows: _“The idea behind directing the accused to pay compensation to the complainant is to give him immediate relief so as to alleviate his grievance. In terms of Section 357(3) CrPC compensation is awarded for the loss or injury suffered by the person due to the act of the accused for which he is sentenced. If merely an order directing compensation is passed, it would be totally ineffective. It could be an order without any deterrence or apprehension of immediate adverse consequences in case of its non-observance. The whole purpose of giving relief to the complainant under Section 357(3) CrPC would be frustrated if he is driven to take recourse to Section 421 CrPC. Order under Section 357(3) CrPC must have potentiality to secure its observance. Deterrence can only_ ## **Crl. Appeal No.1201 of 2002 9** _be infused into the order by providing for a default sentence. If Section 421 CrPC puts compensation ordered to be paid by the court on a par with fine so far as mode of recovery is concerned, then there is no reason why the court cannot impose a sentence in default of payment of compensation as it can be done in case of default in payment of fine under Section 64 IPC. The conclusion, therefore, is that the order to pay compensation may be enforced by awarding sentence of imprisonment in default.”_ 10. Appellant places reliance on _**Somnath Sarkar v. Utpal Basu Mallick (2013 (4) KLT 350)**_ to contend that power to award compensation is not available in Section 138 of N.I Act. It is only when the court has determined the amount of fine, the question of paying compensation out of the same would arise. Following is the dictum in that case: _“The second aspect relates precisely to_ ## **Crl. Appeal No.1201 of 2002 10** _the need for appreciating that the power to award compensation is not available under S.138 of Negotiable Instruments Act. It is only when the Court has determined the amount of fine that the question of paying compensation out of the same would arise. This implies that the process comprises two stages. First, when the Court determines the amount of fine and levies the same subject to the outer limit, if any, as is the position in the instant case. The second stage comprises invocation of the power to award compensation out of the amount so levied. The High Court does not appear to have followed that process. It has taken payment of Rs.80,000/- as compensation to be distinct from the amount of fine it is imposing equivalent to the cheque amount of Rs.69,500/-. That was not the correct way of looking at the matter. Logically, the High Court should have determined the fine amount to be paid by the appellant, which in_ ## **Crl. Appeal No.1201 of 2002 11** _no case could go beyond twice the cheque amount, and directed payment of compensation to the complainant out of the same. Viewed thus, the direction of the High Court that the appellant shall pay a further sum of Rs.69,500/- does not appear to be legally sustainable.”_ 9. Learned counsel for the accused submitted that the punishment imposed by the trial court is harsh. Considering the facts and circumstances of the case and the amount involved, I find that the sentence has to be modified in the following manner to meet the ends of justice. In the result, the appeal is allowed. Finding of the learned 1[st] Additional Sessions Judge, Thiruvananthapuram in Crl.Appeal No.368/1996 is set aside. Conviction of the accused awarded by the learned Judicial First Class Magistrate-I, Attingal in C.C.No.444/1995 is restored. The appellant shall undergo imprisonment till rising of the court below. Considering ## **Crl. Appeal No.1201 of 2002 12** the facts and circumstances, the appellant shall pay a fine of Rs.75,000 (Rupees seventy five thousand only) and if the fine is realised, it shall be paid to the complainant as compensation. In default of payment of fine, appellant shall undergo simple imprisonment for a period of three months. He shall appear before the trial court on 28[th] April, 2014 to serve the sentence. All pending interlocutory applications will stand dismissed. **Sd/A.HARIPRASAD, JUDGE.** **//True Copy//** **P.A to Judge** amk