M/S SREE GOKULAM CHIT AND FINANCIAL CO. (P) LTD. v. State of Kerala and Satheesan K.V.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **TUESDAY, THE 11TH DAY OF JULY 2017/20TH ASHADHA, 1939** **Crl.L.P..No. 233 of 2017 () ---------------------------CC NO. 11/2016 OF JUDICIAL FIRST CLASS MAGISTRATE COURT-III, HOSDURG --------** **PETITIONER/COMPLAINANT :** **M/S.SREE GOKULAM CHIT AND FINANCIAL CO.(P). LTD.,REPRESENTED BY ITS MANAGING DIRECTOR, A.M. GOPALAN, REPRESENTED BY HIS POWER OF ATTORNEY HOLDER, M.T. SUJATHA, AGED 43 YEARS, W/O.V. RAVEENDRAN VARIER, LEGAL CLERK, GOKULAM CHIT AND FINANCE CO(P) LTD., KANHANGAD BRANCH,RESIDING AT NANDAVANAM, KLAIKOD VILLAGE OF HOSDURG TALUK, POST KLAIKOD.** **BY ADV. SRI.K.SIVAKUMAR** **RESPONDENTS/STATE AND ACCUSED :** **-----------------------------** **1. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM-682031.** **2. SATHEESAN K.V., AGED ABOUT 41 YEARS, S/O. NARAYANAN,KOTTILEVEETIL HOUSE, POST ATTENGANAM-671531.** ## **R1 BY PUBLIC PROSECUTOR** **THIS CRIMINAL LEAVE PETITION HAVING COME UP FOR ADMISSION ON 11-07-2017, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **bp** ALEXANDER THOMAS, J. ================== Crl.L.P.No. 233 of 2017 ================== Dated this the 11[th] day of July, 2017 J U D G M E N T This is an application seeking special leave of this Court under Sec. 378(4) of the Cr.P.C. to institute criminal appeal for impugning the judgment dated 6.5.2017 rendered by the trial court concerned (Judicial First Class Magistrate's Court-III, Hosdurg) whereby the accused (R-2 herein) in C.C.No.11/2016 has been acquitted of the offence punishable under Sec.138 of the Negotiable Instruments Act. The petitioner herein is the complainant in C.C.No. 11/2016. 2. Heard Sri.K.Sivakumar, learned counsel appearing for the revision petitioner (complainant) and Sri.Justin Mathew, learned Prosecutor appearing for R-1 State. In the nature of the order that is proposed to be passed in this petition, notice to R-2 (accused) will stand dispensed with. 3. The gist of the case projected in the complaint is that the complainant is a company engaged in the business of chit and finance and that the accused had subscribed to a chit of Rs.3 lakhs, which commenced on 30.4.2012 and terminated on 30.11.2013. That the accused prized the chit on 20.9.2012, but that no security was taken from him and later when the accused had failed to pay the subscription amount of the chit and amount of Rs. 38,704/- became due from him to Crl.L.P.233/17 - : 2 :- the complainant company as on 30.1.2014, the accused was informed about the same and thereupon, he had voluntarily come to the office of the complainant company and had issued Ext.P-3 cheque dated 4.10.2014 for Rs.38,704/-, drawn from his account and payable in favour of the complainant company and when the cheque was presented, the same was dishonoured, which resulted in the issuance statutory demand notice under Sec.138 proviso (b) of the Negotiable Instruments Act and since the accused did not make payment, the instant complaint was instituted, which resulted in the trial. 4. During the trial, the legal clerk of the complainant company was examined as P.W-1 on behalf of the complainant and had marked Exts.P-1 to P-8 documents and the defence had not adduced any oral or documentary evidence. 5. The basic defence set up by the accused during the cross examination of P.W-1 was to the effect that he had given the abovesaid cheque as a blank signed one as security during the commencement of the chit transaction and that he had never executed and issued Ext.P-3 cheque as alleged in the complaint, etc. Since the accused has thereby admitted that the signature in the cheque belongs to him and that the cheque has been drawn from his account, in view of the well settled legal principle flowing from various directions as in Rangappa v. Sri Mohan reported in (2010) 11 SCC 44, Vasanthakumari v. Vijayakumar, reported Crl.L.P.233/17 - : 3 :- in (2015) 8 SCC 378, etc. the complainant could claim the benefit of statutory presumption under Sec.139 of the N.I. Act in the facts of this case. However, from a perusal of the impugned judgment of the trial court it is seen that the trial court has clearly held that the accused could effectively and successfully rebut the said statutory presumption and that since the complainant thereafter has not adduced sufficient evidence to prove their case, the accused is entitled for acquittal, etc. The reasonings on the basis of which, the trial court has arrived at these considered factual findings are as follows: (a) The trial court found that it has come out in evidence that the branch manager of the branch concerned of the complainant company, where the cheque transactions were taken place between the parties is the person who is managing the affairs of that branch. P.W-1 only claims that she was power of attorney holder as well as the legal clerk of the complainant company and working at the Kanhangad branch of the company. There were no averments in the complaint as to the nature of the duties and functions rendered by P.W-1 in her capacity as legal clerk of the company. The trial court found that P.W-1 has no case that the nature of the duties and works of the legal clerk and that of the branch manager are almost the same or that her official functions included various aspects, which gave her the opportunity to have direct knowledge about the transaction in this case. The trial court noted the Crl.L.P.233/17 - : 4 :- firm objection of the accused that P.W-1 has no personal acquaintance with the transactions, since she is only a clerk working in the office. In that regard it is pertinent to note that a 3-Judge Bench of the Apex Court in Narayanan v. State of Maharashtra, reported in (2014) 11 SCC 790 = 2013(4)KLT 21 (S.C) has held that an explicit assertion as to the knowledge of the power of attorney holder about the transactions in question must be specified in the complaint. The trial court has also found that nowhere in the complaint has it been stated that P.W-1 was put in a managerial position and that she had ample opportunity to have direct knowledge about these transactions in the branch as a legal clerk. (b) During the chief examination, P.W-1 has stated that the accused has signed and issued Ext.P-3 cheque in favour of the complainant company and had handed over the same to P.W-1 from the branch office of the complainant company. But during the cross examination she has turned around and stated that the accused had handed over Ext.P-3 cheque not to her, but to the manager of the company in his chambers, but that she had witnessed the execution and handing over of Ext.P-3 cheque. She has further deposed that one Sri.Suresh, was the manager of the branch at that time. But the trial court has noted that the complainant has no case whatsoever in the complaint that the cheque was handed over to Sri.Suresh, the branch manager. But the specific case of the accused is that he had handed over the blank Crl.L.P.233/17 - : 5 :- signed challenge to one Sri.Sudhakaran, who was the branch manager of the company at the time of the commencement of the chit transaction. The complainant had taken two adjournments for examination of Sri.Suresh, the branch manager, to prove the factum of execution and the transaction, but had failed to examine the said person, who was cited as the 2[nd] witness in the complaint itself. These aspects constrained the trial court to view the evidence given by P.W-1 with suspicion and the trial court appears to have taken the view that her version is not credible and trustworthy. (c) The complainant company has admitted that the entire prized amount of the chit was disbursed to the accused without taking any security from him. Ordinarily, a chit company will take security on disbursing the prized amount from the subscriber in order to ensure the timely payment of the further monthly subscription. The complainant company has not given any explanation as to why they have disbursed the said amount without obtaining any security from the accused, which is in deviance from the natural course of their business. It has come out in evidence that the chit was terminated on 30.11.2013 and according to the complainant, the accused had not settled the account by paying the balance subscription. The case of the complainant is that on 4.10.2014, the accused had voluntarily come forward to the branch and had issued Ext.P-3 dated 4.10.2014 for the defaulted dues of Rs.38,704/-, whereas Crl.L.P.233/17 - : 6 :- contra case put up by the accused was that he had never gone to the branch of the complainant company on the above day and that he has never executed the said cheque and that he had given only blank signed cheque at the commencement of the chit transaction. For resolving these two rival assertions, the trial court took note of the crucial fact that even according to the complainant, no security was taken from the accused after paying the prized chit amount and that therefore ordinarily such a chit subscriber is not likely to voluntarily offer his cheque after the termination of the chit, when there is no security with the chit company and after knowing that his bank account has no sufficient balance. It was also found that the cheque was dishonoured as the account of the accused was closed with the bank even prior to the issuance of Ext.P-3 cheque dated 4.10.2014. The trial court has taken the view that if the accused had the intention to cheat the complainant company by issuing the cheque, there was no necessity for him to issue such a cheque since the complainant company did not have any security to realize the due amount. In view of these aspects, the trial court has held that the preponderance of probability would go against the case set up by the complainant company and that the case of the complainant that the accused had voluntarily come forward on 4.10.2014 long after the termination of the chit and executed the cheque, is not probable and credible. In this regard, the trial court also found that the handwritten Crl.L.P.233/17 - : 7 :- entries in the cheque as well as the signature are in distinct and different handwritings. This also was reckoned by the trial court as a strong circumstance to improbabilise the version of P.W-1 that the accused had executed and signed cheque on 4.10.2014 after coming to the branch of company, etc. No explanation is given by P.W-1 regarding the discrepancies in the handwritten portion of the cheque as well as in the signature portion of the cheque. (d) Further, the complainant had never produced Ext.P-8 ledger of accounts along with the complaint, but the same was produced only subsequently. Sri.Suresh, the branch manager who was said to be responsible for the preparation of Ext.P-8 was not examined as a witness. The non production of Ext.P-8 along with the complaint and the non examination of the branch manager, concerned were all circumstances which were taken into account by the trial court to take the view that the version of the complainant company is not probable and credible. 6. It is in the light of these fact findings that the trial court has come to the considered conclusion that the accused has been able to effectively rebut the statutory presumption and that he is entitled for the benefit of doubt. These findings of facts cannot be said to be grossly perverse or unreasonable. Merely because another view is plausible, is no ground to interfere with the considered verdict of acquittal. Crl.L.P.233/17 - : 8 :- 7. In the case State of Rajasthan v. Darshan Singh @ Darshan Lal reported in (2012) 5 SCC 789 = 2012(4) Supreme 72, the Apex Court has held as follows:- “In exceptional cases where there are compelling circumstances and the judgment under appeal is found to be perverse, the appellate court can interfere with the order of acquittal. The appellate court should bear in mind the presumption of innocence of the accused and further that the trial court's acquittal bolsters the presumption of his innocence.” Further, in the case Pudhu Raja and another Vs. State reported in (2012) 11 SCC 196 = (2013) 1 SCC (Cri) 430 , the Apex Court has held that, “ _The Appellate court can interfere only in exceptional cases where there are compelling circumstances and the judgment in appeal is found to be perverse. The Appellate court should bear in mind the presumption of innocence of the accused and further that the trial court's order of acquittal bolsters the presumption of innocence_ ”. 8. On an examination of the aforementioned facts and circumstances involved in this case and on an appreciation of the evidence adduced before the court below and the impugned findings rendered by the court below, this Court is of the considered opinion that even if appeal is entertained, there is very little scope of any interference with the conclusive findings of the court below, which led to the acquittal in the impugned judgment. Accordingly, this Court is constrained to hold that the Leave Petition is bereft of any merit and accordingly, the same is dismissed. sdk+ Sd/ALEXANDER THOMAS, JUDGE ///True Copy/// P.S. to Judge Crl.L.P.233/17 - : 9 :-