K. Shamshada v. State of Kerala and Pallithazhath Muhammed Shafi and Ali Pallithazhath

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE P.G. AJITHKUMAR** **THURSDAY, THE 11[TH] DAY OF JANUARY 2024 / 21ST POUSHA, 1945** **CRL.APPEAL NO. 293 OF 2018 AGAINST THE JUDGMENT DATED 08.05.2015 IN CC 24/2012 OF THE** **JUDICIAL MAGISTRATE OF FIRST CLASS -II, KANNUR Crl.L.P. 120/2018 OF HIGH COURT OF KERALA** ## **APPELLANT/COMPLAINANT:** **K. SHAMSHADA W/O ABDUL RAZAK, 'SAFIYAS', KURUVA, PO KADALAYI,KANNUR DISTRICT.** **BY ADVS. SRI.K.C.SANTHOSHKUMAR SMT.K.K.CHANDRALEKHA** ## **RESPONDENTS/ACCUSED & STATE:** - **1 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KEALA, ERNAKULAM -682031.** - **2 PALLITHAZHATH MUHAMMED SHAFI, S/O ALI, PALLITHAZHATH HOUSE, PUZHAMBRAM, BIYYAM PONNANI, MALAPPURAM DISTRICT-679 577.** - **3 ALI PALLITHAZHATH, AGED 59 YEARS, PALLITHAZHATH HOUSE, PUZHAMBRAM, BIYYAM PONNANI, MALAPPURAM DISTRICT-679 577.** **R1 BY SMT.PUSHPALATHA M.K, SR.PUBLIC PROSECUTOR R2 & R3 BY SRI.BABU S. NAIR** **THIS CRIMINAL APPEAL HAVING COME UP FOR FINAL HEARING** **ON 20.12.2023, THE COURT ON 11.01.2024 DELIVERED THE FOLLOWING:** 2 Crl.Appeal No.293 of 2018 ## **P.G. AJITHKUMAR, J.** **--------------------------------------------------Crl.Appeal No.293 of 2018 ---------------------------------------------------Dated this the 11[th] day of January, 2024** ## **JUDGMENT** This is an appeal filed under Section 374(2) of the Code of Criminal Procedure, 1973 (Code). The appellant is aggrieved by the judgment dated 08.05.2015 of the Judicial Magistrate of the First Class-II, Kannur in C.C.No.24 of 2012. Respondent Nos.2 and 3 were the accused and they were acquitted. The correctness and legality of the said judgment of acquittal are assailed in this appeal. 2. The case arose on a complaint filed by the appellant in protest of a refer report submitted by police after investigation into the matter. The respondent Nos.2 and 3 were tried for an offence punishable under Section 420 read with Section 34 of the Indian Penal Code, 1860 (IPC). At the trial, PWs.1 and 2 were examined and Exts.P1 to P7(b) were marked. Respondent Nos.2 and 3 were examined under Section 313 of the Code. They maintained that they were innocent. The 2[nd] respondent further stated that his cheque book was illegally 3 Crl.Appeal No.293 of 2018 obtained by the husband of the appellant, while they were residing together in the Gulf and misusing two of such cheques, this case has been foisted. No evidence was let in by respondent Nos. 2 and 3. 3. The court below, after considering the evidence, held that the prosecution failed to prove commission of the offence of cheating. The essential reason for recording acquittal of respondent Nos.2 and 3 is that materials are insufficient to establish that at the time of making payment, respondent Nos.2 and 3 had a fraudulent intention to defraud the appellant. It was also held that when Exts.P2 and P3 cheques were issued, it was quite inappropriate to attribute fraudulent intention on their part at the inception of the transaction. 4. The appellant assails the said findings. It is the contention of the appellant that in the light of the evidence let in by her, the intention of respondent Nos.2 and 3 from the very beginning of the transaction to defraud her is evident. But the court below failed to appreciate the evidence in the proper perspective. When the assurance was to make the husband of the appellant a partner of the business proposed to be started 4 Crl.Appeal No.293 of 2018 by the 2[nd] respondent in Bahrain and his commencing the business later on his own name is sufficient evidence to establish his fraudulent intention and the consequent inducement to pay him Rs.20 lakhs. If respondent Nos.2 and 3 had no intention to defraud, Exts.P2 and P3 would have been honoured. That also did not happen. On the said grounds the appellant urges that the impugned judgment is wrong and against the true facts requiring interference by this Court. 5. Heard the learned counsel for the appellant, the learned Public Prosecutor and the learned counsel for respondent Nos.2 and 3. 6. The precise allegations in the complaint are that the 2[nd] respondent assured to add the husband of the appellant as a partner in the cargo transport business he proposed to start in Bahrain. He insisted that Rs.20 lakhs should be paid as his share and the partnership business could soon be commenced. Believing the said words of the 2[nd] respondent, Rs.15 lakhs was paid on 15.06.2009, which was received by the 3[rd] respondent and Rs.5 lakhs was paid to the 2[nd] respondent on 15.08.2009. The assurance was that the joint business could be started in 5 Crl.Appeal No.293 of 2018 January, 2010. The 2[nd] respondent commenced the business, but the husband of the appellant was not added as a party. Technical reasons preventing commencement of a joint business were stated when the money was demanded back. The 2[nd] respondent issued two cheques each for Rs.10 lakhs assuring that there would be enough funds in his account. The cheques dated 03.11.2010 were, however, dishonoured when presented for encashment. By such acts, respondent Nos.2 and 3 were said to have committed an offence punishable under Section 420 of the IPC. 7. PW1 is the appellant. She deposed in court almost in terms of the allegations in the complaint. PW2 is her brother. PW1 deposed that on both occasions of payment, PW2 was also present. On 15.06.2009 the 3[rd] respondent reached the house of the appellant and received Rs.15 lakhs. At that time, the 2[nd] respondent was abroad. On the assurance of the 2[nd] respondent that the joint business could be started soon, Rs.15 lakhs was paid. The 2[nd] respondent demanded payment of balance amount of Rs.5 lakhs within two months. He reached the house of the appellant on 15.08.2009 and received the balance amount of 6 Crl.Appeal No.293 of 2018 Rs.5 lakhs. At that time also, he assured that the partnership business could be started soon. PW1 deposed that later she knew that the business was commenced by the 2[nd] respondent in Bahrain, but her husband was not made a party. It is her version that many a time she sought for the reasons, to which the reply was that for technical reasons a joint business could not be started. 8. PW1 explained that in the above circumstances, she demanded the money back. It is her version that she went to the house of respondent Nos.2 and 3 in relation to that and ultimately Exts.P2 and P3 cheques were issued on giving an assurance that there would be money with the bank to honour the cheques. Both Exts.P2 and P3 are dated 03.11.2010. Her version is that cheques were given on a prior date assuring that the same would be honoured when it is presented in the bank. The cheques were, however, dishonoured and the memo in that regard are Exts.P4 and P5. 9. PW2 is the brother of PW1. He deposed that as told by PW1 only he knew about the arrangement between the appellant and respondent Nos.2 and 3 regarding the joint 7 Crl.Appeal No.293 of 2018 business. However, he testified that in his presence payments of Rs.15 lakhs as well as Rs.5 lakhs were made and it was at the house of the appellant, where her mother was also residing. As requested by the appellant, he went there and in his presence the said payments were made. His evidence therefore is helpful to the prosecution concerning the payments alone. On the strength of the aforesaid evidence, the prosecution would urge that the charge has been proved. 10. In **Ram Jas v. State of U. P. [(1970) 2 SCC 740]** the Apex Court explained the ingredients required to constitute the offence of cheating, which are- - (i) there should be fraudulent or dishonest inducement of a person by deceiving him; - (ii) (a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or - (b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and - (iii) in cases covered by (ii)(b), the act or omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property. 8 Crl.Appeal No.293 of 2018 The above principle was reiterated by the Apex Court in **V.P. Shrivastava v. Indian Explosives Ltd. and others [(2010) 10 SCC 361]** . 11. In **Bhagwati v. CBI, New Delhi [(2003) 5 SCC 257]** the Apex Court dilated the aforesaid principle. It was held that in order to constitute an offence of cheating, it must be shown that the accused had fraudulent or dishonest intention at the time of making the representation or promise and such a culpable intention right at the time of entering into an agreement cannot be presumed merely from his failure to keep the promise subsequently. Viewed so, unless the prosecution is able to establish that at the time of the payment itself, respondent Nos.2 and 3 had the intention to deceive the appellant and her husband, the charge would not sustain. 12. As stated, both PWs.1 and 2 deposed regarding payment of Rs.20 lakhs. Rs.15 lakhs was received by the 3[rd] respondent on 15.06.2009 at the house of the appellant. Rs.5 lakhs was received by the 2[nd] respondent on 15.08.2009 at the house of the appellant. In order to substantiate that such payments were made, PW1 produced Ext.P1 and deposed in 9 Crl.Appeal No.293 of 2018 court that the said amounts were raised by availing a loan by mortgaging the property of her father and also by pledging gold ornaments. Ext.P1 is a ledger abstract relating to a bank account in the name of Smt.Safiya Kalathil. On 10.06.2009, an amount of Rs.11,75,000/- was withdrawn from that account. PW1 stated that it was the said amount along with the remaining, that she had raised was paid to the 3[rd] respondent on 15.06.2009. Ext.P1 does not relate to the account maintained by PW1 or her husband. But when both PWs.1 and 2 deposed in court regarding the payments and Exts.P2 and P3 are claimed to be issued by the 2[nd] respondent in repayment of the said amount, Ext.P1 does not have much importance. The question then is whether Exts.P2 and P3 can be relied on in support of the case of the prosecution, especially when the 2[nd] respondent has a contention that the said cheques were practically stolen by the husband of PW1. 13. While cross-examining PW1, it was put to her that the cheques were illegally obtained by Sri.Irshad, a brother of PW1 from the 2[nd] accused while they were together in the Gulf. PW1 duly denied the said suggestion. During examination under 10 Crl.Appeal No.293 of 2018 Section 313 of the Code, the case of the 2[nd] respondent was totally a different one. What he stated is that the cheque book sent to him from his bank was grabbed by the husband of PW1 from the post box, and two such cheques were misused by PW1 in connivance with her brother Irshad to initiate this case. While cross-examining PW1, it was put to her that a complaint regarding loss of the cheques was lodged by the 2[nd] respondent in the Bank, but no such complaint was brought in evidence. The 2[nd] respondent did not venture to depose it before the court also. The inconsistent explanation of the 2[nd] respondent as to how Exts.P2 and P3 reached the hands of the appellant alludes to its falsity. 14. None of such explanations is supported by any evidence. In that context, the further contention that the signatures in Exts.P2 and P3 were forged has to be looked at. Although such a serious allegation is raised, the 2[nd] respondent did not take any action to substantiate that allegation. On a perusal of Exts.P2 and P3, and the admitted signatures of the 2[nd] respondent in his statement before the court, including the statement submitted under Section 313 of the Code, no much 11 Crl.Appeal No.293 of 2018 difference between the said signatures could be seen. When the 2[nd] respondent failed to give evidence denying his signatures in Exts.P2 and P3, the evidence tendered by PW1 that the said cheques were issued by him in discharge of debt of Rs.20 lakhs owed to her cannot be disbelieved. When the explanation offered by the 2[nd] respondent is thus turned out to be false, that renders further support to the oral testimony of PW1 regarding the transaction between them. In the cross-examination, nothing to disbelieve PW1 has been brought out as to her assertion that on the understanding of adding her husband as a partner in the business, Rs.20 lakhs was paid. 15. Of course, a few inconsistencies like, whether the initial discussion regarding the formation of such a business was in the presence of her husband or not, when did her husband go abroad, etc. surfaced during her cross-examination. Those are trivial contradictions which cannot have the effect of discrediting her veracity, especially when it is proved that Exts.P2 and P3 were duly issued by the 2[nd] respondent. Therefore, I hold that the prosecution succeeded in proving beyond doubt that the 2[nd] respondent on giving assurance that husband of PW1 would be 12 Crl.Appeal No.293 of 2018 added as a partner in business, the 2[nd] respondent proposed to be set up at Bahrain, he had received Rs.20 lakhs. The 2[nd] respondent did not bring forth anything in evidence to show that such an assurance could not be met for any valid reason. The aforesaid evidence substantiates that 2[nd] respondent had a fraudulent intention at the time of receiving money not to make PW1's husband a partner in the business. The said deceptive intention is further evidenced when Exts.P2 and P3 cheques were dishonoured while presented for encashment. 16. The Apex court in **Sangeetaben Mahendrabhai Patel v. State of Gujarat and another [AIR 2012 SC 2844]** held that in a case where a cheque was issued by the accused and it was dishonoured by the banker, apart from the prosecution under Section 138 of the N.I.Act, a prosecution for an offence of cheating is also possible, provided the acts of the accused constitute such an offence as well. The principle laid down by the Apex Court is that in the case of an offence under Section 138 of the N.I.Act, there is a legal presumption that the cheque had been issued for discharging the antecedent liability and that presumption can be rebutted only by the person who 13 Crl.Appeal No.293 of 2018 draws the cheque. Such a requirement is not there in the offences under the IPC. There may be some overlapping of facts in both the cases but ingredients of the offences are entirely different and trial of the drawer of a dishonored cheque for an offence under Section 420 of the IPC is not barred by any statutory provisions. 17. As stated hereinbefore, the fraudulent intention on the part of the 2[nd] respondent by making the promise that the husband of the appellant would be made a partner in his business, and his subsequent retraction is proved beyond doubt by the prosecution. That coupled with the dishonour of Exts.P2 and P3 cheques constitute an offence as defined in Section 415 of the IPC. 18. The definite case of the appellant is that it was the 2[nd] respondent who gave such an assurance. The role of the 3[rd] respondent as per the charge and the proved facts is receipt of Rs.15 lakhs from the appellant. There is no evidence to prove that 3[rd] respondent has given any assurance or he was a privy to the inducement. In such circumstances, the finding of the court below to the extent of absolving the 3[rd] accused from the 14 Crl.Appeal No.293 of 2018 criminal liability cannot be said to be incorrect. But the finding that the 2[nd] respondent did not commit the offence is wrong and liable to be reversed. 19. Accordingly, this appeal is allowed in part. The judgment dated 08.05.2013 in C.C.No.24 of 2012 on the files of the Judicial Magistrate of the First Class-II, Kannur is set aside to the extent of acquitting the 2[nd] respondent. The 2[nd] respondent/ the 1[st] accused is found guilty of the offence under Section 420 of the IPC and convicted. He is sentenced to undergo imprisonment till the rising of the court. Since I propose to order payment of compensation, no sentence of fine is imposed. The 2[nd] respondent/the 1[st] accused is ordered to pay a compensation of Rs.20 lakhs to the appellant. In default of payment of compensation, he shall undergo simple imprisonment for a period of six months. Sd/- ## **P.G. AJITHKUMAR, JUDGE** dkr