Kovilakam Chits & Financial Services v. K.S. Rajendran and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE P.Q.BARKATH ALI** **WEDNESDAY, THE 29TH DAY OF FEBRUARY 2012/10TH PHALGUNA 1933** **CRL.A.No. 1536 of 2003 -----------------------CC.5/2001 of J.M.F.C.-I,THRISSUR** ## **APPELLANT(S):** **------------** **KOVILAKAM CHITS & FINANCIAL SERVICES, LAKSHMI COMPLEX, OPP. METROPOLITAN HOSPITAL, THRISSUR, REPRESENTED BY ITS CHAIRMAN K.K.ANILKUMAR, S/O.KARIAT KARUNAKARAN, ENGANDIYOOR VILLAGE, KUNDALIYOOR DESOM, CHAVAKKAD TALUK, THRISSUR DISTRICT.** **BY ADVS.SRI.P.VIJAYA BHANU SRI.TONY MATHEW** ## **RESPONDENT(S):** **-------------1. K.S.RAJENDRAN, S/O.SANKARANARAYANAN, KOZHIPARAMBIL HOUSE, THRIPRAYAR, NATTIKA.** **2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **R1 BY SRI.MATHEW SKARIA BY SRI.A.F.SEBASTIAN R2 BY PUBLIC PROSECUTOR SRI.NOUSHAD THOTTATHIL.** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 29-02-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **P. Q. BARKATH ALI, J. ----------------------------------------------Crl.A. No. 1536 of 2003 ------------------------------------------------------Dated this the 29[th] day of February, 2012** ## **JUDGMENT** Appellant is the complainant in C.C.No.5 of 2001 on the file of Judicial Magistrate of First Class I, Thrissur. Appellant filed a complaint under Section 138 of the Negotiable Instruments Act against the 1[st] respondent/accused before the lower court. The learned Magistrate by the impugned judgment dated June 2, 2003 dismissed the complaint and acquitted the accused. The complainant has come up in appeal challenging the said judgment of the lower court. 2. The complainant is M/s.Kovilakam Chits & Financial Services, Thrissur, represented by its Chairman (PW1). The case of the complainant as testified by PW1, the Power of Attorned holder before the lower court and as detailed in the complaint, in brief is this:- The complainant is a company engaged in kuri business. The accused subscribed to a kuri conducted by the complainant company. In discharge of Rs.1,45,000/- due to the complainant company, the accused issued the cheque Ext.P1 on 11.02.2000, drawn on the Thrissur Branch of Nedungadi bank. **Crl.A. No. 1536 of 2003** 2 When the cheque was presented for collection, it was returned dishonoured for want of sufficiency of funds in the account of the accused in the bank. Therefore, the complainant company issued Ext.P3 notice dated 9.3.2000 which was returned unserved. As the accused did not pay the amount, the complainant company filed the complaint before the lower court under Section 138 of the Negotiable Instruments Act. 3. On receipt of the complaint, the learned Magistrate recorded the sworn statement of PW1 and took cognizance of the offence. The accused on appearance before the lower court, pleaded not guilty to the charge under section 138 of the Negotiable Instruments Act. The complainant was examined as PW1 and Exts.P1 to P9 were marked on his side. When questioned under section 313 Cr.P.C., the accused submitted that at the time of receiving the amount covered under the kuri, he gave 3 blank signed cheques to the complainant company, that complainant company had filed O.S. 598 of 2000 before the Sub Court for realizing the amount due under the kuri, that property of his surety (Raju) has been attached and the amount has been realized and that misusing one of the said cheques, the complainant created Ext.P1. The accused got himself examined as DW1 and produced Exts.D1 to D3. **Crl.A. No. 1536 of 2003** 3 4. The lower court, on an appreciation of evidence, accepted the case of the accused, that he issued a signed blank cheque while receiving the amount of kuri and misusing the same the complaint created Ext.P1 and dismissed the complaint and acquitted the accused. The complainant has now come up in appeal with special leave, challenging the said judgment of the lower court. 5. Heard the counsel for the appellant/complainant and the counsel for the first respondent/accused. 6. The following points arise for consideration :- - 1) Whether the judgment of the lower court acquitting the accused can be sustained ? - 2) What is the offence committed by the accused ? - 3) In the event of conviction, what is the proper punishment? 7. PW1, the power of attorney holder of the complainant company testified in terms of the complaint before the trial court. Nothing was brought out during his cross examination to discredit his evidence. Further, his evidence is supported by Ext.P1 to P9. 8. The accused as DW1 testified before the lower court that at the time of accepting kuri amount from the complainant **Crl.A. No. 1536 of 2003** 4 company he executed Ext.P6 karar on August 1, 1997, that at that time, he issued three signed blank cheques to the complainant company and misusing one of those cheques, the complainant company created Ext.P1. In an attempt to prove his case, he produced Exts. D1 and D2 pass books. The number of the Ext.P1 cheque is 557373. Ext.D1 pass book was for the period 1996-98. It shows that he was using cheque leaves having numbers 557353 onwards from June 1997 to September 1997 and thereafter cheques having serial number 083762 onwards were used. Ext.D2 pass book is the details of the operation from April 1998 till February 2000. From 1998 onwards, he was using cheques having serial number 739351 onwards. On the basis of the above fact, the learned Magistrate accepted the case of the accused. 9. But there is another aspect in this case, accused has admitted that for the amount due under the kuri, he gave a signed blank cheque. It is admitted that the civil suit filed by the complainant has decreed wherein accused did not contest. Under these circumstances, presumption available under Section 118 and 139 is available to the complainant. The evidence adduced on side of the accused was not enough to rebut the above presumption. **Crl.A. No. 1536 of 2003** 5 10. A single bench of this Court in **General Auto Sales v. Vijayalakshmi (2005(1)KLT 478)** relying on the decision of **Apex Court in ICDS Ltd. v. Beena Shabeer (2002(3)KLT 218(SC)** has categorically held that if the cheque given by guarantor when bounced is found to be within the fold of Section 138 of NI Act and that even if a blank cheque has been given as security, if bounced shall be the subject matter of a prosecution under Section 138 of NI Act. 11. Therefore, in the present case it has to be held that accused has issued Ext.P1 cheque for the legally enforceable liability. That being so, the appeal has to be allowed and the accused has to be convicted u/s. 138 of the Negotiable Instruments Act. 12. As regards the sentence, I feel that a sentence of imprisonment till the rising of court and to pay a compensation of `. 1,45,000/- with default sentence would meet the ends of justice. In the result, the appeal is allowed. The finding of the lower court that 1[st] respondent/accused is not guilty of the offence punishable u/s. 138 of the Negotiable Instruments Act is set aside and he is convicted thereunder and sentenced to undergo imprisonment till the rising of court and to pay **Crl.A. No. 1536 of 2003** 6 compensation of `. 1,45,000/- to the complainant, in default undergo simple imprisonment for three months. Three months' time is granted for payment of the compensation. The accused shall surrender before the trial court on or before March 13, 2012 to suffer the sentence. The compensation amount ordered shall be adjusted towards the decreetal amount in O.S 598 of 2000 of Sub Court, Thrissur. **P. Q. BARKATH ALI, JUDGE.** **stu** **Crl.A. No. 1536 of 2003** 7 **Crl.A. No. 1536 of 2003** 8