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IN THE HIGH COURT OF KERALA AT ERNAKULAM
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PRESENT
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THE HONOURABLE MRS. JUSTICE MARY JOSEPH
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FRIDAY, THE 9[TH] DAY OF JUNE 2023 / 19TH JYAISHTA, 1945
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CRL.A NO. 112 OF 2019
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AGAINST THE JUDGMENT DATED 30.05.2015 IN CC NO.2333/2009 OF JUDICIAL
FIRST CLASS MAGISTRATE COURT-I,THRISSUR
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## `APPELLANT/COMPLAINANT:`
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M/S.WEST LINE AUTO HIRE PURCHASE,
CALVARY ROAD, WEST FORT, THRISSUR - 680 004
REP. BY MANAGING PARTNER, LIJO OUSEPHUNNY.
BY ADVS.SRI.SANTHOSH P.PODUVAL
SMT.R.RAJITHA
SMT.VINAYA V.NAIR
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```
-
RESPONDENTS/ACCUSED & STATE:
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1JOEMON POULOSE
S/O.K.L. POULOSE, KAITHOTTUNGAL HOUSE, NEAR ST.JOSEPH MODEL
HIGH SCHOOL, CHIYYARAM DESOM, POST, THRISSUR TALUK,
THRISSUR DISTRICT - 680 026.
2STATE OF KERALA
REPRESENTED BY THE PUBLIC PROSECUTOR,
HIGH COURT OF KERALA, ERNAKULAM- 682 031.
BY ADV.SRI.K.B.GANGESH
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R2 BY SENIOR GOVERNMENT PLEADER SMT.SEETHA
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THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 09.06.2023,THE
COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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Crl.A. No.112 of 2019
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## **`JUDGMENT`**
## **`Dated this the 9[th ] day of June, 2023`**
The appeal on hand is directed against a judgment passed by Judicial First Class Magistrate Court-I, Thrissur (for short ‘the trial court’) on 30.05.2015 in CC No.2333/2009. The appellant is the complainant in CC No.2333/2009, which is a prosecution launched by him before the trial court for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘the N.I.Act’).
2. For the sake of convenience, the parties to this appeal will hereinafter be referred to as the complainant and the accused in accordance with their status in the complaint.
3. The facts of the case in brief are to the following effect:
The complainant is a registered partnership firm and is represented by it’s Managing Partner. The firm is engaged in hire purchase business of vehicles. One Mr.Sunny A.K, a friend
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of the accused obtained a vehicle bearing Registration No. KL 8L 3043 from the complainant on the strength of a hire purchase agreement bearing No.2000390 dated 12.03.2008 for a consideration of `13,000/-. The accused stood as a guarantor to the above transaction. As per the terms and conditions of the agreement, the hirer and the guarantor, are liable to pay a total sum of `14,300/- by 12 monthly installments, the first one being `1,199/- and the remaining installments, at the rate of `1,191/-. It is also stipulated in the hire purchase agreement that in case of default in making payment as stipulated, the hirer shall pay an additional amount of `1/- for `1,000/- per day as damages. The hirer as well as the guarantor committed default in payment even from the 1[st] installment onwards. It came to the knowledge of the complainant that all good quality spare parts of the vehicle were removed and lesser quality spare parts were substituted. Therefore, a demand notice was issued by the complainant to the hirer as well as the accused. Meanwhile, the vehicle was handed over by the hirer to the accused without the consent of the complainant. The vehicle was sold to a third party in collusion.
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Thereupon, the complainant asked the accused to produce the vehicle for inspection and to pay the arrears of the hire purchase amount. He also informed that in case of failure to produce the vehicle and pay the arrears of hire purchase amount, legal action would be initiated. Then the accused and hirer promised to pay the amount. The accused approached the complainant with an offer to terminate the hire purchase agreement, on clearing the entire liability. Accordingly, a cheque bearing No.007370 drawn on Canara Bank, West Palace Road, Thrissur dated 03.06.2009 duly filled up and signed was issued for a sum of `16,000/-. The accused/guarantor had promised the complainant that the cheque would be honoured on presentation. Thereupon, the complainant accepted the cheque and issued the hire purchase termination letter. Thereafter, the cheque was presented by the complainant for collection through the bank and was returned for the reason “funds insufficient”. Thereupon, a lawyer notice was caused to be issued by the complainant to the accused on 24.06.2009 demanding the amount covered by the cheque and intimating the factum of its dishonour. The
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said notice was served on the accused but he did not pay any amount. Instead, he sent a reply notice raising untenable contentions. Therefore, a complaint was lodged under Section 142 NI Act to launch the prosecution under Section 138 NI Act.
4. On receipt of summons from the trial court, the accused entered appearance. The relevant documents proposed to be relied on by the complainant during trial were furnished to the accused. The particulars of the offence were read over and explained to him. He pleaded not guilty and faced trial.
5. On the side of the complainant, the Managing Partner by name Lijo Ousephunny filed proof affidavit and was cross examined as PW1. Exts.P1 to P11 were also marked. On closure of the evidence of the complainant, the accused was questioned with reference to the incriminating circumstances brought in evidence but he denied all those. He also filed a written statement under Section 313(5) of the Code of Criminal Procedure, 1973 (for short ‘the Cr.P.C.’). He admitted the hire purchase transaction with the complainant. The accused himself mounted the box to depose as DW1 to establish his case.
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6. After hearing the learned counsel representing the complainant and the accused, the trial court arrived at a finding that the complainant failed to establish execution of the disputed cheque marked in evidence as Ext.P2. Thus the trial court arrived at a finding that the complainant failed to prove issuance of Ext.P2 cheque by the accused to the complainant in discharge of a legally enforceable debt. Accordingly, the accused was found not guilty for the offence punishable under Section 138 NI Act and was acquitted under Section 255 (1) Cr.P.C..
7. It is contended by the learned counsel for the complainant that Ext.P2 cheque was issued at the time of issuance of a Hire Purchase termination letter as dealt with in the hire purchase agreement. According to him, the cheque was issued for the damages suffered by the complainant. It was on the strength of Ext.P2 cheque issued that the hire purchase agreement was terminated.
8. In the case on hand, the accused was the guarantor of a hire purchase transaction whereby a vehicle bearing Registration Number KL 8L 3043 was purchased by Mr.Sunny A.K,
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who allegedly was a friend of the accused. A copy of the hire purchase agreement was marked in evidence as Ext.P1. It was executed on 12.03.2008 among Mr.Sunny and the complainant. The accused stood as a guarantor in the hire purchase transaction. As per the terms of the agreement, consideration of the vehicle was to be paid in 12 monthly installments, `1,199/for the 1[st] installment and `1,191/- for the remaining installments.
9. As per the averments of the complainant, there were default in making payments from the side of the hirer as well as the guarantor from the 1[st] installment onwards. Though it was alleged by the complainant that good quality spare parts of the vehicle were replaced by the hirer in collusion with the accused and thereafter the vehicle was sold to a 3[rd] party, materials were not forthcoming in evidence to establish those aspects. However, the hire purchase agreement stood terminated. That factum was also conceded by the complainant. On termination of the hire purchase agreement, the principal debtor/hirer stood discharged of his entire liability. When the principal debtor stood discharged
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of his liability, the accused who stood as a guarantor/surety will not be liable for any amount to the complainant. As per Section 128 of the Indian Contract Act, 1872, the liability of a surety will be co-extensive with that of the principal debtor. When the complainant says that the hirer has no liability, then the guarantor will automatically be discharged of any liability.
10. In the case on hand, voluntary issuance of Ext.P2 was admitted by the accused. When issuance of a signed cheque was admitted by the accused, there cannot be any dispute on attraction of the presumption envisaged under Section 139 NI Act in favour of the complainant. But in the case on hand, the hire purchase transaction was terminated and the principal debtor has been released from the liability. Those aspects were spoken by PW1 with clarity during cross examination. The accused had also mounted the witness box and deposed in accordance with the stand taken by PW1 during cross examination and during his examination under Section 313(1)(b) Cr.P.C. Therefore, the accused can only be taken to have successfully discharged his
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onus to rebut the presumption which stood attracted in favour of the complainant.
The trial court has gone wrong in making an observation that the complainant failed to establish the execution of Ext.P2. The law on the point stands settled by the Apex Court in **Bir Singh v. Mukesh Kumar** [2019 (1) KHC 774 (SC)] that when a signed cheque was established as voluntarily issued, the presumption under Section 139 N.I. Act would be attracted and that will hold the field unless and until evidence is adduced by the accused to rebut the same. The trial court has appreciated the evidence in the proper perspective and found the accused not guilty for the offence under Section 138 N.I. Act. Absolutely no reason is found to interfere with the judgment under challenge. Appeal fail for the reasons and is dismissed.
Sd/- **MARY JOSEPH,**
**JUDGE.**
MJL
