Justin John and others v. Chacko Thomas and The State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE V.G.ARUN** **THURSDAY, THE 20TH DAY OF FEBRUARY 2020 / 1ST PHALGUNA, 1941** ## **CRL.A.No.1219 OF 2007** **ST 1224/2005 DATED 13-09-2006 OF JUDICIAL FIRST CLASS MAGISTRATE COURT-I, KOTTAYAM** ## **APPELLANT/S:** **JUSTIN JOHN, KURIANADU KARA, AKASALAYIL VEEDU,, MONIPPALLY VILLAGE, REP. BY POWER OF ATTORNEY, HOLDER, K.J.MATHEW, AKASALAYIL (MADONA) HOUSE,, PERUMBAIKKATTUSSERY KARA, KUMARANELLOOR P.O. BY ADVS. SRI.C.C.THOMAS (SR.) SRI.NIREESH MATHEW** ## **RESPONDENT/S:** ||**1**|**CHACKO THOMAS,**<br>**VETTUKKUZHIYIL HOUSE, VAZHAPPALLY P.O.,,**<br>**MADHUMOOLA, CHANGANACHERRY.**| |---|---|---| ||**2**|**STATE OF KERALA REPRESENTED BY**<br>**THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,,**<br>**ERNAKULAM.**| |||**R1 BY ADV. SRI.GEORGE SEBASTIAN**| |**OTHER**|**PRESENT**<br>**:**|| |||| |||**SR.PP.B.JAYASURYA**| **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON** **20.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** Crl.A.No.1219 of 2007 -2- ## **JUDGMENT** Dated this the 20[th] day of February, 2020 **The appeal is filed by the complainant in S.T.No.1224 of 2005 of the Judicial First Class Magistrate Court-I, Kottayam, aggrieved by the dismissal of his complaint filed against the first respondent herein alleging commission of the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short “the N.I.Act”).** **2. The gist of the allegation in the complaint is as follows:-** **The accused had issued a cheque for Rs.1,00,000/- to one Justin John towards discharge of his outstanding liability. The complainant is the power of attorney holder of Justin John. The cheque was issued on 26.02.2004 and Justin John went abroad on 06.05.2004. The** Crl.A.No.1219 of 2007 -3- **cheque was presented in July 2004 and was dishonoured on 12.07.2004. Though lawyer notice demanding payment of the amount was issued, no payment was made nor any reply sent and hence, the complaint.** **3. In order to prove the prosecution allegations, PW1; the power of attorney holder gave evidence and marked Exts.P1 to P10. The accused denied the incriminating circumstances brought out against him during his questioning under Section 313 of the Cr.P.C and, in support of the defence case, got himself was examined as DW1 and also DW2, the Branch Manager of his Bank. Exts.D1 to D4(a) were marked on the defence side.** **4. The defence put up by the accused was that he was the Director of a Company by name Grace Communication and Services (P) Ltd, of which PW1's son James Shine Mathew was the** Crl.A.No.1219 of 2007 -4- **Managing Director. The Company had incurred certain debts and the Managing Director had borrowed amounts from various persons, towards the discharge of which, blank cheques collected from the Directors of the Company, including the accused, were issued, without their knowledge or consent. By misusing one such cheque, the present compliant is filed.** **5. In order to substantiate his defence, the accused produced Ext.D1; copy of the notice issued by him, requiring James Shine Mathew to return Ext.P2 cheque. Ext.D3 is the acknowledgment card evidencing receipt of the notice by James Shine Mathew. Ext.D4 is a copy of the stop payment letter dated 21.05.2004 issued to the accused, requiring his bank not to make payment towards Ext.P2 cheque pointing out that there were pending issues between the** Crl.A.No.1219 of 2007 -5- **accused and James Shine Mathew; the Managing Director of Grace Communication and Services Pvt. Ltd.** **6. On a detailed consideration of the evidence tendered, the trial court found the version put forward by the accused to be more probable and on that basis, held the accused to have succeeded in rebutting the presumption under Section 139 of the N.I.Act. It was found that the complainant had failed to establish that the cheque had been issued by the accused towards the discharge of a legally enforceable debt due to the complainant.** **7. Assailing the findings of the trial court, the learned Counsel for the appellant would submit that though the accused had produced Ext.D2, claiming to be the reply notice issued on receipt of Ext.P5 demand notice, the trial court** Crl.A.No.1219 of 2007 -6- **itself had found that Ex.D2 could not be accepted in evidence. It is pointed out that Ext.D2 is dated 15.08.2004, which being Independence Day was a holiday, and is hence indicative of the character of the accused. It is contended that the complainant having established execution of the cheque, the trial court committed a mistake in coming to the conclusion that the accused had succeeded in rebutting the presumption under Section 139 of the N.I.Act, based on surmises and conjectures.** **8. It is submitted that even if it is accepted that the accused had caused Ext.D1 notice to be issued to James Shine Mathew, that will not lead to the irresistible conclusion that the cheque was not issued in favour of the complainant. It is contended that no reliance could be placed on Ext.D3 acknowledgment card,** Crl.A.No.1219 of 2007 -7- **the necessary particulars having not been entered therein. That, in the event of the acknowledgment card not being accepted as proof of service of Ext.D1 notice, there was no other proof regarding the serving of Ext.D1; is the contention.** **9. It is contended that the legal position that a complaint under Section 138 can be filed and maintained through the power of attorney holder is well settled. It is submitted that the conclusion arrived at by the trial court was erroneous and hence, liable to be corrected in appeal.** **10. The learned Counsel for the accused raised a primarily objection against the maintainability of the complaint. The objection is based on the decision of the Honourable Supreme Court in** _**Narayanan v. State of Maharashtra [2013 (4) KLT 21 (SC)]**_ **. In** _**Narayanan,**_ Crl.A.No.1219 of 2007 -8- **the question regarding maintainability of the complaints filed through power of attorney holders of the payee under the cheque had attracted the attention of the Apex Court through a reference order. In terms of the reference order, the Honourable Supreme Court framed the questions to be decided as under:** _**“(i) Whether a Power of Attorney holder can sign and file a complaint petition on behalf of the complainant?/ Whether the eligibility criteria prescribed by Section 142 (a) of NI Act would stand satisfied if the complaint petition itself is filed in the name of the payee or the holder in due course of the cheque?**_ _**(ii) Whether a Power of Attorney holder can be verified on oath under Section 200 of the Code?**_ _**(iii) Whether specific averments as to the knowledge of the Power of Attorney holder in the impugned transaction must be explicitly asserted in the complaint?**_ _**(iv) If the Power of Attorney holder fails to assert explicitly his knowledge in the complaint then can the Power of Attorney holder verify the complaint on oath on such presumption of knowledge? (v) Whether the proceedings**_ Crl.A.No.1219 of 2007 -9- _**contemplated under Section 200 of the Code can be dispensed with in the light of Section 145 of the N.I. Act which was introduced by an amendment in the year 2002?”**_ **Q. No.(iii) is as to whether specific averments as to the knowledge of the power of attorney holder about the impugned transaction must be explicitly asserted in the complaint? Dilating on that question, the Apex Court held as follows in paragraph 23 of the judgment:-** _**“23) In the light of the discussion, we are of the view that the power of attorney holder may be allowed to file, appear and depose for the purpose of issue of process for the offence punishable under Section 138 of the N.I. Act. An exception to the above is when the power of attorney holder of the complainant does not have a personal knowledge about the transactions then he cannot be examined. However, where the attorney holder of the complainant is in charge of the business of the complainantpayee and the attorney holder alone is personally aware of the transactions, there is no reason why the attorney holder cannot depose as a witness. Nevertheless, an explicit assertion as to the knowledge of the Power of Attorney holder about the transaction in question must be specified in the complaint. On this count, the fourth**_ Crl.A.No.1219 of 2007 -10- ## _**question becomes infructuous.**_ **The conclusion at paragraph 26 of the judgment with regard to the question is as under:-** _**“(iii) It is required by the complainant to make specific assertion as to the knowledge of the power of attorney holder in the said transaction explicitly in the complaint and the power of attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case.”**_ **11. A reading of the judgment, leave no scintilla of doubt that, when a complaint under Section 138 of the N.I.Act is instituted through a power of attorney holder, specific averment with regard to the knowledge of the power of attorney holder about the transaction and the issuance of the cheque has to be spelt out in the complaint. A perusal of the complaint in the instant case shows that, other than a statement that “as the complainant had to go abroad to U.K., he had executed a registered power of** Crl.A.No.1219 of 2007 -11- **attorney on 03.05.2004, authorising the power of attorney holder to present Ext.P2 cheque and to collect the amount as per the cheque and in case of non-payment, to initiate necessary legal action against the drawer of the cheque for and on behalf of the complainant", absolutely nothing has been stated regarding the personal knowledge of the power of attorney holder about the transaction between the complainant and the accused leading to the issuance of Ext.P2 cheque. 12. The learned Counsel for the appellant would submit that personal knowledge of the power of attorney holder regarding the transaction and issuance of the cheque was specifically stated in his proof affidavit filed before the trial court and that, even otherwise, all details regarding the power of attorney's knowledge about the transaction was brought out in the cross-** Crl.A.No.1219 of 2007 -12- ## **examination of PW1.** **13. The contention being devoid of merit, cannot be accepted. Going by the decision in** _**Narayanan**_ **, the personal knowledge of the power of attorney holder regarding the transaction has to be specifically spelt out in the complaint itself, in the absence of which the complaint will not be maintainable.** **14. It was the duty of the trial court to scrutinize the complaint and to find out as to whether the necessary assertions regarding the personal knowledge of the power of attorney holder about the transaction, is incorporated in the complaint. In the absence of such details, cognizance should not have been taken on the complaint. The defective complaint on which cognizance was illegally taken, cannot subsequently be improved on the basis of the** Crl.A.No.1219 of 2007 -13- **statements in the proof affidavit or the testimony of the power of attorney holder. Therefore, the contention of the learned Counsel for the accused that the complaint was not maintainable has to be accepted.** **15. The learned counsel for the accused has raised a further contention that Ext.P1 power of attorney do not contain any specific recital authorising the power of attorney holder to give evidence on behalf of the complainant. On a careful reading of Ext.P1 power of attorney, it is evident that necessary recital authorising the power of attorney holder to appear before court is contained therein.** **16. The next contention is based on Exts.D1, D3 and D4, relied on by the trial court. It is submitted that though the allegation is to the effect that Ext.P2 cheque was issued on** Crl.A.No.1219 of 2007 -14- **26.02.2004 and PW1 had admitted that the accused had promised to repay the cheque amount by 31.03.2004 and the complainant had left India only by 6.05.2004, absolutely no demand was made for payment of the cheque amount was made while the complainant was in India. It is pointed out that the cheque was presented for encashment only in July, 2004. In the meanwhile, Ext.D1 notice had been issued to James Shine Mathew, the son of PW1, demanding return of Ext.P2 cheque. Ext.D3 evidences receipt of the notice by James Shine Mathew. Even though the learned Counsel for the appellant raised a contention that in the absence of necessary entries in Ext.D3, the same cannot be relied upon, I am forced to reject the contention for the reason that Ext.D3 contains the signature of the addressee and the date of receipt of the notice. Another crucial aspect is** Crl.A.No.1219 of 2007 -15- **that, even after receipt of Ext.D1 notice, neither was any reply sent by James Shine Mathew nor was the cheque presented for collection. The accused had followed up Ext.D1 with Ext.D4 stop payment notice issued to his bank. In Ext.D4, the accused had specifically stated that the reason for requesting to stop payment was the dispute between him and James Shine Mathew regarding the conduct of Grace Communication and Services (P) Ltd. It was much later to Exts.D3 and D4 (a) that Ext.P2 cheque was presented for encashment. That too, on the strength of a power of attorney executed on 03.05.2004. As was rightly held by the trial court, proper understanding of the evidence tendered makes the defence case of the cheque was not having been issued to the complainant, more probable. In such circumstances, it is to be held that the accused** Crl.A.No.1219 of 2007 -16- **had succeeded in rebutting the presumption under Section 139 of the N.I.Act and that the complainant had failed to prove that the cheque was issued in his favour towards discharge of a legally enforceable debt or liability of the accused.** **In the aforesaid circumstances, I find no reason to interfere with the judgment of the trial court acquitting the accused. Consequently, the appeal is dismissed.** Sd/- **V.G.ARUN JUDGE** Scl/20.02.2020