M/S. Oriental Metals v. Faizal K and State of Kerala

Crl.Appeal No.1756/2006 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SUNIL THOMAS** **WEDNESDAY, THE 22ND DAY OF JANUARY 2020 / 2ND MAGHA , 1941** ## **CRL.A.No.1756 OF 2006** **AGAINST THE ORDER/JUDGMENT IN ST 232/2004 DATED 23-06-2006 OF JUDICIAL MAGISTRATE OF FIRST CLASS -IV, KOCHI** ## **APPELLANT/COMPLAINANT:** **M/S. ORIENTAL METALS** **MARKET ROAD, ERNAKULAM, REPRESENTED BY, POWER OF ATTORNEY HOLDER THOMAS WILLIAMS, S/O.K.T.ANTONY, PALLURUTHY, KOCHI-682 006.** ## **BY ADV. SRI.V.JOHN SEBASTIAN RALPH** ## **RESPONDENT/ACCUSED:** - **1 FAIZAL.K, AGED 42 YEARS, PROPRIETOR, HI-HEIGHTS, 34/338A., 16, PENTA QUEEN APARTMENTS, KOCHI-682 024.** **2 STATE OF KERALA REP. BY THE PUBLIC PROSECUTOR, THE HON'BLE HIGH COURT OF KERALA,, ERNAKULAM.** **R1 BY SRI.FAIZAL.K [PARTY IN PERSON]** **R2 BY PUBLIC PROSECUTOR SRI.D.CHANDRASENAN R2 BY PUBLIC PROSECUTOR SRI. M.S.BREEZE** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 14-12020, THE COURT ON 22-1-2020 DELIVERED THE FOLLOWING:** Crl.Appeal No.1756/2006 2 ## **JUDGMENT** ## **( Crl.Appeal No.1756 of 2006)** ## **22/1/2020** Complainant in ST No.232/2004 of the judicial First Class Magistrate - IV, Kochi, aggrieved by the acquittal of the accused in a proceeding under Section 138 of the Negotiable Instruments Act, has preferred this appeal. 2. Complainant is a partnership firm represented by the Managing Partner. Case of the complainant was that the accused, who was running a business under the name and style “M/s.HiHeights” having its office at Penta Queen Apartments, Palarivattom, had purchased certain articles from the complainant and, towards the value of it, a sum of Rs.9,95,042.52 was due from the accused. Towards partial discharge of the liability, the accused allegedly executed and delivered a cheque for a sum of Rs.9,71,990/- dated 25/8/2004. The cheque was presented for collection. It was returned dishonoured with endorsement “funds insufficient”. A statutory notice was issued. Since the amount was not paid, the complaint was laid alleging offence punishable under section 138 of the NI Act. 3. Before the court below, the accused appeared and contested the proceedings. On the side of the complainant, the power of attorney holder was examined as PW1. Exts.P1 to P10 were marked. Crl.Appeal No.1756/2006 3 Accused got himself examined as DW1 and Ext.D1 was marked on his side. The court below, on evaluation of the entire evidence found that PW1 was competent to represent the complainant and that the cheque was issued towards the discharge of a legally recoverable debt. However, the court found that Ext.P8 statutory notice was sent in a wrong address and since there was nothing to show that it was served properly on the complainant, it was held that there was no service of statutory notice. Consequently, the complaint was dismissed and the accused was acquitted holding that the complainant failed to prove that the accused had committed offence punishable under section 138 of the NI Act. This is under challenge in the present proceedings. 4. Heard the learned counsel for the appellant and the accused, who appeared and contested the proceedings in person. 5. Essentially, the allegation against the accused is sought to be established through the evidence of PW1. Admittedly, he is the power of attorney holder of the complainant. He gave evidence substantially in accordance with the complainant. He deposed that the accused had earlier conducted the business in the name and style of M/s.Puthiyedath Engineering Constructions and had transaction with the complainant. Exts.P2 to P4 were the ledger extracts in relation to M/s.Puthiyedath Engineering Construction and also in relation to M/s. Hi.Heights, which was the proprietory concern of the accused. PW1 Crl.Appeal No.1756/2006 4 deposed that towards the partial discharge of the money due to the complainant, Ext.P5 cheque was executed and delivered. Ext.P7 was the memo issued by the Bank indicating its return. Ext.P8 was the copy of the notice sent by the complainant and Ext.P10 was its acknowledgment card. 6. Version given by PW1 was challenged by the accused on the ground that PW1 was only the power of attorney holder and could not have given details regarding the transactions which were not within his knowledge. To substantiate the above legal position, the accused relied on the decision reported in _**A.C.Narayanan v. State of**_ _**Maharashtra and Anr(AIR 2014 SC 630),**_ wherein it was held that the power of attorney holder, who has no knowledge regarding the transactions, cannot be examined as a witness in the case under section Section 138 of the NI Act. 7. I am not impressed by the above contention of the accused. PW1 was the marketing manager - dealer net work of the complainant firm. He had stated in the Chief Examination itself that he had knowledge regarding the transaction. In the cross examination he clarified that he know the facts as conveyed by other officers and as revealed from the records. He also stated that the cheque was signed in his presence. Hence, apart from being the power of attorney holder, he had independent knowledge regarding the entire transaction. To that extent, I am not inclined to discard the version of Crl.Appeal No.1756/2006 5 the complainant on the only ground that he was the power of attorney holder. 8. Another contention set up by the accused at the time of hearing of the appeal was that the complainant was not the managing partner of the Oriental Metals and materials are available with him to establish it. Accused relied on the documents produced along with Crl.M.A.No.2/2019 which he proposes to let in evidence. Those were documents issued by the Registrar of Firms giving the details of the firm Oriental Metals. Accused has also relied on another letter issued from the Labour office dated 6/1/2018 to indicate that PW1 was not an employee of the Oriental Metals. He relied on the decision reported in _**Shreeram Finance Corporation v. Yosin Khan (1989 AIR 1769)**_ to support it. None of these documents were produced before the court below. Apart from that, it is also pertinent to note that the complainant did not get an opportunity to peruse the above evidence and to explain as to how as on the date of issuance of the above certificate, his name was not referred in the records of the Registrar of Firm. Above all, it is pertinent to note that the accused in his evidence had deposed that he had transaction with the complainant firm and the entire account was closed. However, in the reply to the questioning under section 313 Cr.P.C.his only contention was that he was not liable to pay any amount. Hence, the present contention cannot be accepted. Consequently, Crl.M.A.Nos.1/2019 Crl.Appeal No.1756/2006 6 and 2/2019 to let in additional evidence at the time of appeal cannot be entertained and are dismissed. 9. PW1 in his evidence has given details of transaction, He has spoken about the existence of liability and the issuance of cheque towards the discharge of liability. It is pertinent to note that the accused when examined as DW1 had admitted that the cheque bears his signature. He had also admitted that the cheque was drawn on his account. However, his explanation regarding the cheque was that, while he was the sub contractor of Puthiyadath engineers, cheque given to them had reached the complainant somehow or other. The case set up by the accused in his chief examination itself was that the account was settled by him. In the cross examination, he admitted that he had business dealings with the complainant since 2003. He used to purchase items on credit as well. He used to settle it by cash as well as cheque. There is absolutely no evidence to substantiate his case of discharge. 10. A perusal of the entire evidence shows that the complainant had succeeded in proving the existence of legally enforceable debt and that the cheque was issued towards the discharge of it. The court below has also arrived at the same conclusion. 11. The specific contention of the accused before the court below was that Ext.P8 statutory notice was sent in wrong address and Crl.Appeal No.1756/2006 7 that he had not received it. Ext.P8 is sent to the accused in the address “Mr.Faizal, Proprietor, Hi-Heights, 34/338-A-16, Penta Queen Apartments, Palarivttom,Cochin - 682024”. Ext.P10 is the acknowledgment card,with post office shown as Palarivattom - 682024. It is not seen signed by the accused, but signed by some other person. In the complaint, the address of the accused is shown as “Faizal K,Proprietor, M/s.Hi Heights, 34/338, A-16, Penta Queen Apartments, Palarivattom. Ernakulam”. According to the complainant, this was the address given by the accused and it was his office address. DW1 in his evidence admitted that the name of his firm was Hi-Heights, and that it was situated in his house at Padivattom. Office was also in his home. He asserted that he did not receive the notice. Specific contention of the accused was that he was residing at Padivattom and not Palarivattom and if it is sent in Palarivattom, he will not receive the above letter. The accused relied on Ext.P4 ledger extract which showed the name of accused as “High Heights Evaluators, Padivattom”. 12. Ext.P8 notice was not returned on the ground that address differed. Even though DW1 entered the box and denied the address, it is pertinent to note that he has no case that except the word “padivattom,” was missing, he has also no dispute regarding the remaining part of the address. He has also no case that the remaining part of the address was wrong. PW1 admitted that the Crl.Appeal No.1756/2006 8 accused was residing at Padivattom though his office was at Palarivattom. The lower court records show that the summons was sent from the trial court to the accused in the same address shown in the complaint. It was served on him. The bail bond was seen executed by the accused in the very same address as shown in complaint. The appeal was also filed in the same address and notice served on the accused. Even though the accused had contended that his address was not correct and that he will not receive letters in that address, strangely except his interested testimony, he has not independently let in any evidence to establish that his office address was at Padivattom and the Padivattom is not within the area of “palarivattom Ernakulam”. The accused in his evidence as DW1,has given his village as Kakkanad and Taluk as Kanayanur. In Section 313 Cr.P.C.questioning, he gave his village as Kakkand and Taluk as Padivattom. The entire defence now set up by the accused that his address is at Padivattom and not Palarivattom will fall to ground on a reference to his own document produced and marked as Ext.D1. Ext.D1 is the copy of the partnership deed issued by the Registrar of Firms to the accused in his address “Faizal, Penta Queen Apartments, A Block, VI floor, Padivattom, Kochi - 682024. This clearly shows that Padivattom and Palarivattom are places in Cochin - 682024 and address in Ext.P8 is substantially same as is Ext.D1. 13. Accused to substantiate his contention relied on the Crl.Appeal No.1756/2006 9 decisions reported in _**C.C.Alavi Haji v. Palapetty Muhammed and Another(2007 (2) KHC 932)**_ , _**Anil Raj.v Integrated Finance Co.Ltd. [(2005) 2 KLT 972)**_ and _**Arumughan Pillai v. State of Kerala (2005**_ _**(3) KLT 506)**_ . In Anil Raj's case, it was only held that if notice was not actually served on the sendee he was not responsible for such non service. Alavi Haji's case was relied on by the appellant also. In that case, it was held by the Honble Supreme Court, relying on earlier decision in **K.Bhaskaran v. Sankaran Vaidhyan Balan and Another ( AIR 1999 SC 3762)** that Section 138 of the NI Act required to be construed liberally. It was held that the court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative. Section 138(c) was intended to protect honest drawers whose cheques may have been dishonoured for fault of others and not to protect unscrupulous drawers who never intended to honour the cheques issued by him, It was further held that any drawer who claims that he did not receive the notice sent by post can within 15 days of receipt of summons make payment of the cheque amount and get the complaint dismissed. In this case, this assumes significance since the case of accused was that he had discharged the debt. It was reiterated by the Supreme Court in the above case that once the notice was dispatched the duty of the complainant was over and the next depends on what the sendee does. In this case, according to Crl.Appeal No.1756/2006 10 complaint, the statutory notice was sent in the available address. The notice was served by the postal authorities. If the accused has a case that it was not his correct address, and that it was not served on him, he should have produced evidence showing his correct proper address. It was not done. On the other hand, it is evident that the case of the accused that he was not served with notice is false and is liable to be rejected. Hence, I am inclined to hold that there was proper service. 14. In the light of the materials on record clearly indicating that apart from the interested testimony of the accused that notice was not send in the correct address, I feel that the court below was not justified in dismissing the complaint on that ground alone. 15. Having considered the entire facts in the above perspective, I am inclined to hold that the finding of the court below that there was no service of notice is not legally sustainable. Finding of the court below is hence liable to be interfered. Available materials indicate that the complainant had succeeded in establishing that the accused has committed offence punishable under NI Act. In the light of the above finding, acquittal of the accused is liable to be reversed. 16. Regarding the sentence, it seems that the complaint is of the year 2004. The amount remained unpaid even now. Having considered the huge amount involved, I am inclined to impose substantive sentence of imprisonment till the rising of the court and Crl.Appeal No.1756/2006 11 also to pay a fine amount of Rs.10,50,000/-. In case of default, the accused shall undergo SI for six months. If the amount is remitted, sum of Rs.10,50,000/- shall be paid to the complainant. **Sd/-** dpk **SUNIL THOMAS JUDGE** Crl.Appeal No.1756/2006 12 ## **APPENDIX** **RESPONDENT'S/S EXHIBITS: ANNEXURE R1 TRUE COPY OF EXTRACT OF R1 FIRM DT. 19.02.2018 ISSUED BY THE REGISTRAR OF FIRM. ANNEXURE R1(A) TRUE COPY OF LETTER FROM THE ASST. LABOUR OFFICER DT. 24.01.2018.**