High Court of KeralaSingle Judge2014-12-17Revision petition allowed in part; sentence mod...

K.J. Roy v. The Vythiri Primary Co-operative Agricultural and Rural Development Bank Ltd. and State of Kerala

Case / Petition Number:Crl.Rev.Pet.No. 2180 of 2014

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: K. Ramakrishnan
Judgment Date: 2014-12-17
Court Decision / Holding: With the modification of the sentence, the revision petition is allowed in part and disposed of accordingly. The revision petitioner is sentenced to undergo imprisonment till the rising of the court and to pay a fine of Rs.81,000, in default to undergo simple imprisonment for three months. If the amount is realized, it shall be paid to the complainant as compensation under Sec. 357(1)(b) of the Code. If the petitioner has already paid the amount, the court below may treat it as substantial compliance of compensation and record the same. Execution is stayed pending compliance for one month. Annexure-A1 is to be returned to the petitioner after necessary acknowledgment, and the order preserves the option of applying Beena v. Balakrishnan Nair and Sivankutty v. John Thomas for recording the payment in the registers. The petition is disposed of in part.
Final Disposition: Revision petition allowed in part; sentence modified to imprisonment till rising of the court with Rs.81,000 fine and compensation to be treated under Sec. 357(1)(b); stay of execution and compliance directions issued.

Parties to the Case

Appellants / Petitioners

K.J.Roy

Respondents

The Vythiri Primary Co-operative Agricultural and Rural Development Bank Ltd., No.W 32, Kalpetta P.O., Wayanad District represented by its Secretary and Principal Officer M.N.VASU
State of Kerala rep. by Public Prosecutor, High Court of Kerala, Ernakulam

Legal Representation & Advocates

Counsels for Petitioners

• Sri. Sheji P. Abraham

Counsels for Respondents

• Sri. N. Suresh

Case Synopsis & Summary

This is a Criminal Revision Petition filed by the accused, K.J. Roy, challenging a conviction under Section 138 of the Negotiable Instruments Act (NI Act) and the accompanying sentence. The matter arose from a private complaint by The Vythiri Primary Co-operative Agricultural and Rural Development Bank Ltd., alleging loan default and the issuing of a cheque (Ext. P1) that bounced for insufficient funds (Exts. P2 and P3). The bank issued a notice (Ext. P4, P5) and posted receipt (Ext. P6), but the accused did not discharge the liability, leading to a conviction under Section 138 NI Act by the Judicial First Class Magistrate, Kalpetta, which was upheld on appeal (Crl.A.11/2010) by the Sessions Court. The High Court of Kerala, while admitting the revision, examined the facts and noted that the accused had paid the debt and submitted that the accused had supplied a blank signed cheque as security, which allegedly was misused. Relying on Supreme Court pronouncements that Section 138 offences are civil in nature but given a criminal gloss by the statute, the High Court set aside the substantive three‑month imprisonment and modified the sentence to imprisonment till the rising of the court, with a fine of Rs.81,000 and default imprisonment for three months. It directed that the fine may be treated as compensation under Sec. 357(1)(b) and provided time for compliance, keeping execution in abeyance. The petition was allowed in part.

Provisions of Law Cited

Section 138 of the Negotiable Instruments ActCrPC Section 313(5)CrPC Section 357(1)(b)

Legal Doctrines & Maxims

Offences under Section 138 NI Act are civil in nature but with criminal colour (Damodar S. Prabhu v. Sayed Babalal H., JT 2010 (4) SC 457)
The civil nature doctrine reaffirmed in Kaushalya Devi Massand v. Roopkishore (AIR 2011 SC 2566)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that the loan agreement involved a blank signed cheque given as security; there are contentions of misuse of that blank cheque by the bank and that the criminal penalty should be tempered since the entire amount had been paid. It is urged that the offence under Section 138 NI Act is civil in nature, and the sentence should reflect civil liability rather than punitive imprisonment. The counsel submits that the trial court's sentence is harsh and not proportionate to the facts, especially given the absence of a defence statement and the admitted repayment.

Contentions of Respondents

The bank argues that the accused defaulted on the loan and issued a cheque that bounced; the evidence (PW1 and Exts. P1–P6) proves the offence; the State/Public Prosecutor supports the conviction and contends that the sentence falls within the statutory framework, keeping in mind the seriousness of cheque dishonour and the need to deter such default. The respondents maintain that the concurrent findings of fact should not be disturbed and that the sentence should ensure adequate remedy to the complainant.

Cited Precedents (4)

Case Name	Citation	Treatment	Explanation
Damodar S. Prabhu v. Sayed Babalal H.	JT 2010 (4) SC 457	Positive	SC held that Section 138 NI Act offences are civil in nature but have a criminal colour; court relies on this principle to justify reducing the substantive sentence.
Kaushalya Devi Massand v. Roopkishore	AIR 2011 SC 2566	Positive	Reiterates the civil-nature rationale for Section 138 offences and supports the modification of punishment.
Beena v. Balakrishnan Nair & another	2010 (2) KHC 851	Mentioned Only	Cited to justify recording partial payment as substantial compliance, but not central to the main ruling.
Sivankutty v. John Thomas & another	2012 (4) KLT 21	Mentioned Only	Cited in context of treatment of payment against the fine; not the principal basis for the decision.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN** **WEDNESDAY, THE 17TH DAY OF DECEMBER 2014/26TH AGRAHAYANA, 1936 Crl.Rev.Pet.No. 2180 of 2014 () --------------------------------** **AGAINST THE JUDGMENT IN CRL.A 11/2010 of SESIONS COURT,KALPETTA DATED 05-09-2011** **AGAINST THE JUDGMENT IN CC 51/2009 of J.M.F.C, KALPETTA DATED 26-11-2009** **REVISION PETITIONER/APPELLANT/ACCUSED:** **---------------------------------------** **K.J.ROY, AGED 39 YEARS, S/O.K.P.JOHNY, PROPRIETOR MAHARANI JEWELLERS, KALPETTA POST, VYTHIRI TALUK, WAYANAD DISTRICT.** **BY ADV. SRI.SHEJI P.ABRAHAM** ## **RESPONDENTS/RESPONDENT/COMPLAINANT/STATE:** **-----------------------------------------** **1. THE VYTHIRI PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD., NO.W 32, KALPETTA P.O. WAYANAD DISTRICT REPRESENTED BY ITS SECRETARY AND PRINCIPAL OFFICER M.N.VASU, AGED 54 YEARS, S/O.M.K.NARAYANAN, RESIDING AT DEFFODIL, KALPETTA VILLAGE.** **2. STATE OF KERALA REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA ERNAKULAM.** **R2 BY PUBLIC PROSECUTOR SRI.N. SURESH** **THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 17-12-2014, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **Crl.Rev.Pet.No. 2180 of 2014 ()** ## **--------------------------------** ## **APPENDIX** ## **REVISION PETITIONER'S ANNEXURES:** **ANNEXURE-A1: TRUE COPY OF THE CERTIFICATE ISSUED BY THE RESPONDENT BANK TO THE PETITIONER.** ## **/TRUE COPY/** **P.S TO JUDGE** **CL** ## **K. RAMAKRISHNAN, J.** ................................................. Crl.R.P.No.2180 of 2014 .................................................. Dated this the 17[th] day of December, 2014. ## **O R D E R** The accused in C.C.No.51/2009 on the file of the Judicial First Class Magistrate Court, Kalpetta is the revision petitioner herein. The case was taken on file on the basis of a private complaint filed by the first respondent bank against the revision petitioner alleging commission of the offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the Act'). 2. The case of the complainant in the complaint was that the revision petitioner had availed a loan from the bank and an amount of Rs.80,594/- was due and in discharge of that liability, he had issued Ext.P1 cheque which when presented was dishonoured for the reason funds insufficient vide Ext.P2 dishonour memo which was intimated to the complainant vide Ext.P3 intimation letter. They issued issued Ext.P4 notice vide Ext.P5 postal receipt and the same was received by the revision petitioner evidenced by Ext.P6 postal acknowledgment. But he had not paid the amount. So he had committed the offence punishable under Section 138 of the Act. Hence the complaint. 3. When the revision petitioner appeared before the Crl.R.P.No.2180 of 2014 2 court below, particulars of offence were read over and explained to him and he pleaded not guilty. In order to prove the case of the complainant, the Manager of the complainant bank was examined as PW1 and Exts.P1 to P6 were marked on their side. The revision petitioner was dispensed with notice as he was exempted from personal appearance. Though he had undertaken to file defence statement, no statement has been filed as provided under Section 313 (5) of the Code. No evidence was adduced on his side in defence. After considering the evidence on record, the court below found the revision petitioner guilty under Section 138 of the Act, convicted him thereunder and sentenced him to undergo simple imprisonment for three months and also to pay fine of Rs.81,000/-, in default to undergo simple imprisonment for three months more. Aggrieved by the same, the revision petitioner filed Crl.A.No.11/2010 before the Sessions Court, Wayanad and the learned Sessions Judge dismissed the appeal confirming the order of conviction and sentence passed by the court below. Aggrieved by the same, the present revision has been filed by the revision petitioner/accused before the court below. 4. Considering the scope of enquiry and also considering the fact that he had paid the amount to the Crl.R.P.No.2180 of 2014 3 bank, this Court felt that the revision can be disposed of at the admission stage itself after hearing the counsel for the revision petitioner and the learned Public Prosecutor appearing for the second respondent dispensing with notice to the first respondent. 5. The counsel for the revision petitioner submitted that a blank signed cheque given at the time of availing loan was misused but that aspect was not properly appreciated and the sentence imposed is also harsh. 6. The learned Public Prosecutor supported the concurrent findings of the court below. 7. The case of the complainant in the complaint was that the revision petitioner availed a loan and in discharge of the balance amount of Rs.80,594/-, he had issued Ext.P1 cheque, which when presented was dishonoured for the reason fund insufficient. In order to prove the case of the complainant, the Manager of the complainant bank was examined as PW1 and he proved the case of the complainant. He denied the suggestion that blank signed cheque given as security was misused. No evidence was adduced by the revision petitioner to prove his case. He did not send any reply to the notice issued as well. All these things will go to show that the case of the revision petitioner is not at all Crl.R.P.No.2180 of 2014 4 believable. So, the courts below were perfectly justified in convicting the revision petitioner/accused for the offence under Section 138 of the Act and the concurrent finding of the court below do not call for any interference. 8. As regards the sentence is concerned, the court below has sentenced the revision petitioner to undergo simple imprisonment for three months and also to pay fine of Rs.81,000/-, in default to undergo simple imprisonment for three months. If fine is realized, the same be given to the complainant as compensation under Section 357(1)(b) of the Code. This was confirmed by the appellate court. In the decision reported in **Damodar S. Prabhu v. Sayed Babalal H.** (JT 2010 (4) SC 457), the Hon'ble Supreme Court has held that cases under Section 138 are basically of civil in nature but criminal colour has been given to it by incorporating the same in the Act and the intention of the legislature was to make the drawer of the cheque to pay the amount and not to send him to jail. The same view has been reiterated in the decision reported in **Kaushalya Devi Massand v. Roopkishore** (AIR 2011 SC 2566). So in view of the above dictum, since the court below has imposed more than the cheque amount as fine, the substantive sentence of three months imprisonment imposed by the Crl.R.P.No.2180 of 2014 5 court below appears to be excessive. Further, the petitioner had produced a document to show that the entire amount covered by the cheque has been paid. However, I am not going into the genuineness of the documents produced. Considering this aspect, this Court feels that the substantive sentence imposed by the court below can be set aside and the same can be reduced to imprisonment till the rising of court while confirming the sentence of fine with default sentence and to pay the fine amount to the complainant as compensation under Section 357(1)(b) of the Code. So, the sentence is modified as follows: The revision petitioner is sentenced to undergo imprisonment till the rising of court and to pay fine of Rs.81,000/-, in default to undergo simple imprisonment for three months. If the amount is realized, the same be paid to the complainant as compensation under Section 357(1)(b) of the Code. If the revision petitioner had paid the amount directly to the complainant either after filing of the revision or prior to the filing of the revision and produces proof of payment of the same and representative of the complainant bank appears before the court below and acknowledges receipt of the same, then the court below is directed to treat the same as substantial compliance of the payment of Crl.R.P.No.2180 of 2014 6 compensation out of fine as directed by the court below and confirmed by this Court and record the same in the respective registers as provided in **Beena v. Balakrishnan Nair & another** (2010 (2) KHC 851) and **Sivankutty v. John Thomas & another** (2012 (4) KLT 21) and permit the revision petitioner to serve the substantive sentence of imprisonment till the rising of court imposed by this Court. The revision petitioner is granted one month time to comply with the directions and appear before the court below and to satisfy the court below regarding the payment of amount. Till then, execution of the sentence is directed to be kept in abeyance. Office is directed to return Annexure-A1 produced by the revision petitioner before this Court to the revision petitioner on getting necessary acknowledgment and and keep the attested copy in the file. With the modification of the sentence, the revision petition is allowed in part and disposed of accordingly. ## **Sd/K. RAMAKRISHNAN, JUDGE.** cl /true copy/ P.S to Judge Crl.R.P.No.2180 of 2014 7