K. Thomas v. Chandra Babu and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 30TH SEPTEMBER, 2008 / 8TH ASWINA, 1930 **CRL.A.No. 700 of 2001 (A)** - (CC.250/1997 of JUDL.FIRST CLASS MAGISTRATE -I, TRIVANDRUM) .................... APPELLANT/COMPLAINANT: ---------------------------------K.THOMAS, KALLUVILA VEEDU, THOONGAMPARA, KATTAKKADA, THIRUVANANTHAPURAM. BY ADV. SRI.M.S.ANILKUMAR SMT.D.JAMEELA DEVI RESPONDENTS/ACCUSED: ------------------------------- 1. CHANDRA BABU, PROPRIETOR, VILAYIL POULTRY MEAT SERVICE, VEMBAYAM.P.O., THIRUVANANTHAPURAM. 2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. R2 BY PUBLIC PROSECUTOR SMT.K.L.LAKSHMI RANI. THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 30/09/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **V.K.MOHANAN, J. --------------------------------------------Crl.A.No. 700 of 2001 --------------------------------------------Dated this the 30[th] day of September, 2008** ## **J U D G M E N T** When the matter is taken up today for consideration, there is no representation either for the appellant or for the respondents. Even though the parties are not represented by their counsel, I propose to proceed with the appeal and dispose of the same on merit. 2. This appeal is preferred by the complainant in a private complaint for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the N.I.Act'). By the impugned judgment, the trial court acquitted the accused under Section 255(1) of the Criminal Procedure Code. It is the above order of acquittal which is challenged in this appeal. 3. C.C.No.250 of 1997 is instituted upon a private complaint filed by the appellant before the court below under Section 138 of the N.I.Act on the allegation that the complainant is a poultry feed and chicken meat merchant and the sole proprietor of “Renjini Sales Corporation” and the accused is a customer of the complainant and towards ## **Crl.Appeal No.700 of 2001** ## **:-2-:** the liability arising out the of the chicken meat purchased, the accused issued a cheque dated 31.1.1996 for an amount of Rs.25,000/- and when the same was presented for encashment, dishonoured on 29.3.1996 for the reason “ **Exceeds arrangements and Payment stopped by the drawer** ”. According to the complainant, on getting dishonour memo, he had caused to send a lawyer notice which was accepted by the accused, but no amount was paid and hence, he preferred the complaint. Originally, the complaint was filed before the Chief Judicial Magistrate Court, Thiruvananthapuram wherein the sworn statement of the complainant was recorded and the case was taken on file as C.C.No.604 of 1997 and subsequently, it was made over to the trial court wherein the case was renumbered as C.C.No.250 of 1997. When the accused appeared before the court below, the particulars of the offence were read over to him to which he pleaded not guilty and thereafter, the complainant was examined as PW1 and Exts.P1 to P7 were marked as documentary evidences. After closing ## **Crl.Appeal No.700 of 2001** ## **:-3-:** of the complainant's evidence, the accused was examined under Section 313 of the Cr.P.C. He denied the entire allegations and he had further stated that he was the customer of Ranjit Sales Corporation and out of the total amount of Rs.4,26,713/- due to the Corporation from him, he had deposited Rs.1,68,000/- in the account of the Corporation in the Palayam Branch, he had paid Rs.30,000/- to the complainant as per voucher and paid Rs.2 lakhs to the complainant by cash and the balance amount due to the Corporation from him is only Rs.28,713/-. He had also stated that the cheque in question and other cheques were issued as security towards the transaction. No evidence either oral or documentary was adduced by the defence. The trial court framed five issues for its consideration and after elaborate discussion and consideration of the entire materials and evidence on record, the trial court came to a conclusion that Ext.P1 cheque was issued by the accused only as a security and not for the discharge of any debt or liability and hence, according to the court ## **Crl.Appeal No.700 of 2001** ## **:-4-:** below, the complainant has not succeeded to establish their allegation against the accused. Thus, the accused was found not guilty of the offence punishable under Section 138 of the N.I.Act and accordingly, he was acquitted under Section 255(1) of Cr.P.C. It is the above finding and order of acquittal which are challenged in this appeal. 4. Since the appellant as well as the respondents are not represented by counsel, I have carefully considered the contentions raised through the appeal memorandum, perused the judgment of the trial court as well as materials and evidence on record. On appreciation of the materials and evidence on record, it can be seen that there were frequent transactions between the appellant and the accused connected with the chicken meat business and the accused is a consumer of the complainant who used to purchase chicken meat from the complainant and at the time of purchase, he used to issue cheques to the complainant as the security and on payment of the amount due, the ## **Crl.Appeal No.700 of 2001** ## **:-5-:** cheque will be returned to the accused. The accused has also admitted the transaction, but he had denied the issuance of cheque for the said amount. He had admitted that a total sum of Rs.4,26,713/- is due from him to the Corporation and towards that liability, he had deposited a sum of Rs.1,68,000/- in the account of the complainant-Corporation in the Federal Bank, Palayam Branch and he had further paid a sum of Rs.30,000/- to the complainant as per the voucher and also effected payment of Rs.2 lakhs to the complainant by cash and thus, according to the accused, out of Rs.4,26,713/-, he had paid a total sum of Rs.3,98,000/- towards the said liability and the balance amount due to the complainant/Corporation is only Rs.28,713/-. Ext.P2 is the dishonour memo with respect to Ext.P1 cheque. The reason for the dishonour is “ **Exceeds arrangements and Payment stopped by the drawer** ”.It is also one of the contentions taken by the defence to the effect that the cheque in question was issued in favour of Ranjit Sales ## **Crl.Appeal No.700 of 2001** ## **:-6-:** Corporation and neither the Corporation nor its Proprietor has issued any lawyer notice as contemplated by the Act. Thus, though the defence has admitted the issuance of cheque, his specific case is that there is no legal debt or liability towards the complainant as he had already paid and discharged the liability. It is also the case of the accused that he had issued 23 cheques to the complainant and the complainant had also admitted that those 23 cheques were presented for collection. It is also brought on record regarding the claim of the defence about the payment of the amount to the complainant and the same was also not denied by the complainant. Thus, according to the accused/defence, the cheque in question was issued as a security and out of Rs.4,26,713/-, except an amount of Rs.28,713/-, all other amounts were paid off and as such, no other liability exists. In this juncture, it is relevant to note that the suggestion of the defence that the complainant had withdrawn an amount of Rs.1,68,000/- deposited by the ## **Crl.Appeal No.700 of 2001** ## **:-7-:** accused in the address of the complainant has not been denied by the complainant. On the basis of the above materials and evidence, the trial court came to a conclusion that Ext.P1 cheque is issued by the accused only as a security and not for the discharge of any debt or liability. The above approach and finding of the court below appears to be incorrect and against the settled position of law. 5. In the present case, the accused had admitted the issuance of Ext.P1 cheque, but according to him, it was issued only as a security and therefore, no offence will lie. The trial court has approved the above defence which, according to me, is incorrect. In the decision in **General Auto Sales** v. **Vijayalakshmi** [2005(1) KLT 478], this Court had held that even if a blank cheque has been given towards the liability or even as security, when liability is assessed and quantified, if cheque is filled up and presented to bank, the person who had drawn the cheque cannot avoid criminal liability under Section 138 of the N.I.Act. Therefore, the finding of the ## **Crl.Appeal No.700 of 2001** ## **:-8-:** court below is unsustainable and liable to be interfered with. 6. It is also pertinent to note that in the present case, both the parties are agreed and admitted the transaction and the defence went to the extent to admit that he was owing an amount of Rs.4,26,713/- due to the Renjini Sales Corporation connected with the purchase of chicken meat from the complainant. It is also his case that through several occasions, he had repaid a total sum of Rs.3,98,000/- to the complainant and the balance is only an amount of Rs.28,713/-. The complainant has also not denied the above claim, particularly, there is no specific denial to the suggestion put to the complainant by the defence that he had withdrawn an amount of Rs.1,68,000/- deposited by the accused in his account. It is also admitted by the complainant that the accused had issued to him altogether 23 cheques and all those cheques were presented for encashment. The complainant has also admitted that he had approached the police for settlement. **Crl.Appeal No.700 of 2001** ## **:-9-:** 7. From the above, as observed earlier, there were frequent transactions between the parties. If that be so, according to me, the court below, especially in the light of the finding arrived on by me on the strength of the decision reported in **General Auto Sales' case** (cited supra), has to consider afreshly whether the complainant has made out a case under Section 138 of the N.I.Act connected with Ext.P1 cheque and also has to find specifically whether the accused had issued the cheques for the discharge in whole or in part of any debt or other liability of the drawer namely, the accused herein. Only on such finding, the presumption under Section 139 will come to the aid of the complainant. Of course, it is open to the defence to rebut that presumption by making out a probable case. In the present case, the accused had already got as case that he had paid back altogether a sum of Rs.3,98,000/- out of the total liability of Rs.4,26,713/- and the remaining amount is only Rs.28,713/-. The court below had come into the conclusions that the cheque in question was ## **Crl.Appeal No.700 of 2001** ## **:-10-:** issued as a security and cheque was not issued for the discharge of any debt or liability, no offence under Section 138 was made out. According to me, the above approach is also not correct. The Apex Court, in the decision reported in **Krishna Janaradhan Bhat** v. **Dattatraya Hegde** [2008(1) KLT 425 (SC)], held that the existence of legally recoverable debt is not a matter of presumption under S.139 and it does not raise a presumption in regard to existence of a debt also. In the above decision, the Apex Court had also held that the accused for discharging the burden of proof raised upon him under a statute need not examine himself and he may discharge burden on the basis of materials brought on record. In the above decision, the Apex Court had also held that where chances of false implication could not be ruled out, background fact and conduct of parties together with their legal requirements were required to be taken into account. In the light of the above decision, it is for the trial court to find out whether there is any liability or recoverable debt due from the accused ## **Crl.Appeal No.700 of 2001** ## **:-11-:** towards the complainant out of the business transaction. It is also for the trial court to consider whether the accused has made out a probable case so as to rebut presumption under Section 139 of the N.I.Act available to the complainant. 8. In the light of the above facts ad circumstances and also the settled position of law, I am of the view that it is only just and proper to remand the matter for fresh consideration of the court below. Parties are at liberty to adduce fresh evidence, if they are so advised. Therefore, for enabling the court below to come into a fresh decision in the light of the above discussions, the judgment dated 28.2.2001 in C.C.No.250 of 1997 of the Judicial First Class Magistrate – I, Thiruvananthapuram is set aside and the matter is sent back for fresh disposal. The court below is directed to take up the complaint within one month from the date of receipt of a copy of this judgment. The court below shall issue process to the parties and to proceed with the complaint and dispose of the same on merit, in **Crl.Appeal No.700 of 2001** **:-12-:** accordance with law. Since the case pertains to the year 1997, the trial court shall expedite the trial and conclude the same within a reasonable time. The Criminal Appeal is disposed of as above. **V.K.Mohanan, Judge** MBS/ ## **Crl.Appeal No.700 of 2001** **:-13-:** ## **V.K.MOHANAN, J.** -------------------------------------------- Crl.A.NO. 700 OF 2001 -------------------------------------------- J U D G M E N T DATED: 30-9-2008 ## **Crl.Appeal No.700 of 2001** **:-14-:**