K. SIVANANDAN v M. SHAHABUDHEEN and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE V.G.ARUN** **WEDNESDAY, THE 9[TH] DAY OF AUGUST 2023 / 18TH SRAVANA, 1945 CRL.A NO. 271 OF 2018** **ST 506/2015 OF CHIEF JUDICIAL MAGISTRATE PALAKKAD Crl.L.P. 64/2018 OF HIGH COURT OF KERALA** **APPELLANT/S:** K.SIVANANDAN AGED 51 YEARS AGED 51 YEARS, S/O. KASU, KRISHNAKRIPA, JALADHA NAGAR, C.N.PURAM, PALAKKAD. BY ADV SRI.JACOB SEBASTIAN **RESPONDENT/S:** 1 M.SHAHABUDHEEN AGED 53 YEARS AGED 53 YEARS, S/O. MUHAMMED HANEEFA RAVUTHER, SR BUILDERS (OLD), MHR BUILDERS (NEW), ANNAMALA BUILDING (OLD), JALALIYA APARTMENTS (NEW), DIARA STREET, PALAKKAD, PIN - 678 001. 2 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY ADV SRI.R.HARISHANKAR ## **OTHER PRESENT:** PP M.C.ASHI THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 04.07.2023, THE COURT ON 09.08.2023 DELIVERED THE FOLLOWING: Crl.Appeal No.271 of 2018 -2- ## **JUDGMENT** Dated this the 09[th] day of August, 2023 Appellant is the complainant in S.T.No.506 of 2015 of the Chief Judicial Magistrate Court, Palakkad. The complaint was filed, alleging commission of the offence under Section 138 of the Negotiable Insruments Act ('the N.I.Act' for short) by the first respondent. In his complaint, the appellant alleged that the first respondent had borrowed Rs.9,00,000/- in three installments, of which Rs.2,00,000/- was borrowed on 19.01.2012, Rs.3,00,000/- on 13.02.2012 and Rs.4,00,000/- on 23.03.2012. The amounts were borrowed by promising to repay the entire sum by 31.03.2013. Contrary to the promise, the first respondent failed to repay the money and upon the appellant's demand, issued Ext.P1 cheque dated 30.07.2013 for Rs.9,00,000/- in discharge of the Crl.Appeal No.271 of 2018 -3- debt. The cheque, on presentation, was dishonoured for insufficiency of funds. Although statutory notice was issued to the first respondent, informing him about the dishonour and requiring him to pay the amount, the first respondent issued reply raising false and frivolous contentions. In order to prove his case, the appellant got himself examined as PW1 and the Manager of the drawee bank as PW2. The first respondent denied the incriminating circumstances put to him during questioning under Section 313 Cr.P.C. Other than marking Ext.D1, the ledger extract of the first respondent's account, no other evidence, either oral or documentary was tendered by the first respondent. The trial court, on appreciation of evidence and consideration of the legal contentions found the appellant to have failed in proving that the cheque was supported by valid consideration and thereupon, acquitted the first respondent as per Crl.Appeal No.271 of 2018 -4- Section 255(1) Cr.P.C. 2. Heard Adv.Jacob Sebastian for the appellant and Adv.R.Harishankar for the first respondent. 3. Learned Counsel for the appellant contended that the court below had committed gross illegality by acquitting the first respondent, even after finding that the appellant had successfully proved the ingredients necessary for attracting the offence under Section 138 of the Negotiable Instruments Act. For acquitting the first respondent, the court below wrongly relied on the decision in _**Divakaran K.K. v State**_ _**of Kerala and Another [2016 (4) KHC 901],**_ holding that suppression of material particulars in a complaint filed under Section 142 of the Act is sufficient ground for acquitting the accused. It is contended that the essential particulars were stated in the complaint and the acquittal is bad Crl.Appeal No.271 of 2018 -5- even otherwise, since _**Divakaran** (supra)_ stands overruled by the Division Bench in _**Basheer K v**_ ## _**C.K.Usman Koya and Another [2021 (2) KHC 432]**_ . 4. Adv.R.Harishankar, learned Counsel for the first respondent contended that, from the cross-examination of the appellant, it had come out that the appellant, first respondent and another person had availed Rs.5,00,000/- each as loan from the Vypari Vyavasayi Ekopana Samithi, on mutual guarantee. Ext.P1 cheque was given as security for the loan and had been entrusted with the appellant for handing over to the Samithi, as the appellant was the office bearer of the Samithi. Instead of handing over the cheque to the Samithi, the appellant misused it for filing the complaint. Moreover, the appellant did not have the financial capacity to advance an amount of Rs.9,00,000/-, which fact is evident from the testimony of the appellant himself. Crl.Appeal No.271 of 2018 **==> picture [16 x 8] intentionally omitted <==** 5. A perusal of the impugned judgment shows that the trial court had discarded the defence version of the first respondent having handed over blank signed cheque leaf to the appellant. After appreciation of evidence, trial court came to the conclusion that the complainant had succeeded in substantiating his case about the drawing and issuance of Ext.P1 cheque by the first respondent. It is also found that the accused had failed to substantiate his defence of having delivered a blank signed cheque leaf to the complainant, which the appellant had fabricated and presented as Ext.P1. After entering such findings, the trial court accepted the accused's contention that the complainant had failed to mention details of the transaction in the notice and in the complaint. According to the learned Magistrate, failure of the complainant to state the reason for lending an exorbitant amount of Rs.9,00,000/- for a period of one year without Crl.Appeal No.271 of 2018 -7- securing any document and without interest had made complainant's version suspicious. The other finding is that, withdrawal of substantial amounts from the complainant's account during the relevant period is not sufficient to attract the presumption under Section 139, since the alleged payment could have been made by way of cheques instead of cash. Based on the said findings, the presumption under Section 139 was held to have been rebutted and reliance was placed on _**Divakaran** (supra)_ to reach the conclusion that the complainant had failed to prove consideration for Ext.P1 cheque beyond reasonable doubt. 6. A close scrutiny of the judgment reveals that the acquittal is based primarily on the complainant's failure to state the details regarding the nature of transaction in the notice and complaint. For entering such finding, the Crl.Appeal No.271 of 2018 -8- trial court relied on the decision in _**Divakaran**_ _(supra)._ The legal position set out in the aforementioned judgment is no longer good law in view of the subsequent Division Bench decision in _**Basheer K** (supra)_ , which arose out of a reference order passed by a learned Single Judge after noticing the contradictory judgments rendered by two other Judges in _**Divakaran** (supra)_ _**and**_ _**Surendra Das B v State of Kerala and Another**_ _**[2019 (3) KHC 105]**_ . While in _**Divakaran** (supra),_ it was held that the nature and date of transaction and date of issuance of cheque are material facts; which if not disclosed in the statutory notice, will amount to a fatal inadequacy, _**Surendra Das** (supra)_ held that the omission and error in the notice to state the nature of debt or liability will not render the notice invalid. After detailed consideration, the reference was answered at paragraph 40 in the Crl.Appeal No.271 of 2018 -9- following manner; _“40. The reference is answered as follows: The dictum laid down in Divakaran v. State of Kerala (2016 (4) KHC 901) that non disclosure of the nature of the transaction between the parties in the notice is fatal and that the suppression of the particulars of the transaction in the complaint is sufficient to order acquittal is held to be not good law. The law laid down in Surendra Das B. v. State of Kerala and Anr. (2019 (3) KHC 105) is held to be the correct law.”_ Therefore, the complainant's failure to mention the nature and details of the transaction in the notice will not render the notice invalid and thus be a ground for acquittal. 7. A perusal of the complaint shows that the dates on which the amounts were advanced to the accused, failure of the accused to repay the amount within time and issuance of cheque dated 30.07.2013 has been clearly stated. When the complaint contains such details, failure to Crl.Appeal No.271 of 2018 **==> picture [23 x 8] intentionally omitted <==** mention the date on which the cheque was issued cannot, by itself, be a ground for acquittal. 8. Although it was contended that the entries in the cheque were not in the handwriting of the accused, the attempt made to prove that fact did not succeed, the petition for sending the cheque for expert opinion having been rejected by the trial court. Going by the Apex Court decision in _**Bir Singh v Mukesh Kumar [(2019) 4 SCC 197]**_ even if the entries in the cheque are found to have been made by a person other than the accused, that is not sufficient to rebut the presumption under Section 139. 9. As regards the defence of the accused that the cheque was entrusted as security for the mutual loans availed by the accused, complainant and another, except a few suggestions made during cross-examination, no materials were produced. It is settled law that, suggestions made during Crl.Appeal No.271 of 2018 -11- cross-examination cannot be the basis for holding the presumption under Section 139 to have been rebutted. Therefore, I find the grounds of acquittal to be unsustainable. In the result, the Crl.Appeal is allowed. The impugned judgment is set aside. Consequently, the first respondent is found guilty of the offence under Section 138 of the N.I.Act and sentenced to simple imprisonment for a day, till rising of the court, and fine of Rs.10,00,000/- (Rupees ten lakhs only). In case of failure to deposit the fine, the first respondent shall undergo simple imprisonment for three months. The fine, if remitted or realised, shall be paid to the appellant as compensation under Section 357(1) Cr.P.C. The first respondent is granted time till 31.10.2023 for paying/depositing the fine amount. Sd/- ## **V.G.ARUN JUDGE** Scl/