Mulamootil Consumer Credits Ltd. v. Lowarence and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE K.HARIPAL** **FRIDAY, THE 11[TH] DAY OF JUNE 2021 / 21ST JYAISHTA, 1943** **CRL.A NO. 597 OF 2011** **AGAINST THE JUDGMENT IN ST 3042/2008 OF JUDICIAL MAGISTRATE OF FIRST** **CLASS IV (MOBILE), THIRUVANANTHAPURAM DATED 17.04.2010 APPELLANT/COMPLAINANT:** **M/S.MULAMOOTIL CONSUMER CREDITS LTD.** **HOMESTEAD MUSEUM BAINS COMPOUND, NANDANCODE,, TRIVANDRUM695002, REPRESENTED BY ITS AUTHORISED SIGNATORY, POWER OF ATTORNEY HOLDER, SMT.BINU KURIAN, AGED 45, W/O.KURIAN JOHN, 'BIJI VILLA', THAIKKATTUKARA P.O., ALUVA-683106.** ## **BY ADV SRI.BIJU HARIHARAN** ## **RESPONDENTS/ACCUSED & STATE:** **1 MR.LOWARENCE, S/O. VARGHESE, EDAVAL, MARATHARAVILAKOM, OTTASHEKARAMANGALAM P.O., NEYYATTINKARA, THIRUVANANTHAPURAM, PIN-655125.** **2 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, KOCHI-31.** ## **OTHER PRESENT:** **SR.PP - SRI. M.S.BREEZ, AMICUS CURIAE - SRI. G. RANJITH** **THIS CRIMINAL APPEAL HAVING COME UP FOR HEARING ON 31.03.2021, THE COURT ON 11.06.2021 DELIVERED THE FOLLOWING:** Crl.A.597/2011 2 ## **JUDGMENT** This is an appeal preferred under Section 378(4) of the Code of Criminal Procedure, Cr.P.C. for brief, challenging the legality and correctness of the judgment of the Judicial First Class Magistrate-IV (Mobile Court), Thiruvananthapuram. That judgment was rendered in a complaint preferred alleging offence punishable under Section 138 of the Negotiable Instruments Act. By the impugned judgment, the learned Magistrate dismissed the complaint and acquitted the accused under Section 255(1) of the Cr.P.C. 2. The complainant is a company registered under the Companies Act which is dealing in granting loan for purchase of consumer items. According to the complainant, on 02.01.2008 the first respondent had issued cheque No.0129224 dated 02.01.2008 for Rs.10,800/- drawn on Ottasekharamangalam branch of the State Bank of Travancore, in discharge of a legally enforceable liability. When presented for encashment through Kuravankonam branch of the Indian Overseas Bank Crl.A.597/2011 3 on 14.02.2008, it returned dishonoured due to insufficiency of funds. Thereafter the complainant caused to issue lawyer notice which was returned unclaimed. It means the first respondent was not prepared to discharge the liability and that made the complainant to move the complaint before the trial court on 29.4.2008. 3. Pursuant to the summons, the 1[st] respondent appeared and pleaded not guilty. His personal appearance was dispensed with by the court. Thereafter the power of attorney holder was examined as PW1 and Exts.P1 to P10 were marked. Examination of the accused under Section 313 Cr.P.C.was dispensed with under the proviso since the personal appearance of the 1[st] respondent stood dispensed with. There was no evidence in defence. However Exts.D1 to D4 were marked on the side of the defence. After hearing counsel on both sides, by the impugned judgment, the learned Magistrate found that the appellant could not prove that the Ext.P1 was issued in discharge of a legally enforceable liability and on that premise, the case ended in acquittal. After obtaining leave under Section 378(4) of the Cr.P.C., the appellant has preferred this appeal. 4. Though notice was duly served on the 1[st] respondent, he did Crl.A.597/2011 4 not take care to enter appearance before this Court. Therefore, Adv.Sri.G.Renjith, on being volunteered, was nominated as Amicus Curiae. I heard the learned counsel for the appellant as also the learned Amicus Curiae. 5. According to the learned counsel for the appellant, the first respondent had availed a loan from the appellant for purchasing a motor bike. The total amount of the loan was Rs.39,295/-, which was agreed to be repaid in 36 months at the rate of Rs.1,092/- per month. But the first respondent had defaulted repayment; he had paid only Rs.13,197/-. When there was default, the vehicle was re-possessed by the company and was sold in auction for Rs.18,500/-. After adjusting the sale price of the motor bike, an amount of Rs.10,800/- was due to the company for which the first respondent issued the cheque in question and that was how it was presented for encashment. According to the learned counsel, after failing to make any reply to the lawyer notice and adducing evidence for discharging the burden cast upon the first respondent, he cannot be heard to say that he has no liability to pay the amount. The counsel also relied on the decision reported in **K.R. Rathikumar v. N.K. Santhamma and** Crl.A.597/2011 5 ## **another [ILR 2006 (4) Ker. 268].** 6. On the other hand, the learned Amicus Curiae has submitted that Ext.P1 has no consideration. The appellant did not produce any document to prove the exact amount, whatsoever, due to the appellant from the respondent. According to him, in fact, the respondent had repaid excess amount and amounts are due to the first respondent from the appellant. The principal amount of the transaction is not discernible from the Ext.P9 statement of accounts. Rs.39,295/- includes interest due to the appellant for a period of 36 months. But the contract was prematurely rescinded and the hire purchase agreement stood terminated. According to the learned counsel, the vehicle was re-possessed by the appellant before September 2007 and therefore, after re-possession, it cannot be thought that Ext.P1 cheque was issued by the first respondent. It is improbable also. He also relied on the decision reported in **Sudha Beevi v. State of Kerala [2004 (2) KLT 746]** . 7. The learned counsel for the appellant, in reply, submitted that the Ext.P1 is not a post-dated cheque and therefore the decision in **Sudha** **Beevi** , cited supra, has no application to the facts of the case. Crl.A.597/2011 6 8. Before proceeding to the rival contentions, it is advantageous to point out the documents relied on by the party respondent. Ext.D1 is shown as the pass book. In fact, it is a statement in printed form, proving the payment of amount by the respondent in instalments ranging from 18.3.2006 to 18.02.2007, which shows that some amounts were repaid by the first respondent towards the transaction. Apparently, entries in the document were made by the staff members of the appellant. Similarly, Ext.D2 is yet another lawyer notice given to the first respondent and his surety on 28.10.2008, which was replied by the first respondent through Ext.D3 notice. In Ext.D2 the amount claimed is Rs.12,660/- as against Rs.10,800/- shown in Ext.P1 cheque. Whatever it may be, Exts. D1 to D4 are admitted by PW1. 9. The appellant contends that after re-possessing the vehicle and selling it in public auction, on adjusting the sale price, an amount of Rs.10,800/- became due and in order to realise the same, on notice, the first respondent had appeared and issued the Ext.P1 cheque. But that has been denied by the first respondent. 10. The learned Magistrate disbelieved the version of the Crl.A.597/2011 7 appellant. According to the Magistrate, the appellant had already collected Rs.31,697/-, which includes Rs.13,197/- paid by the first respondent in 16 instalments and also the sale price of the motor bike, Rs.18,500/-; as against the principal amount of Rs.27,100/-, the appellant has already collected Rs.31,697/- within a period of 18 months and therefore the appellant is not entitled to get the cheque amount as claimed by him and therefore, believing the version of the respondent, the case ended in acquittal. 11. It is trite that merely for the reason that the accused had admitted his signature on a negotiable instrument, its execution cannot be assumed. In order to draw the presumptions under Sections 118 and 139 of the Act, either the execution of the cheque should be admitted or it has to be proved that it was executed and issued in discharge of a legally enforceable liability. Here the first respondent does not admit the execution of the cheque. Then the question is, whether it is proved having executed, as claimed by the appellant. But there are reasons to doubt the genuineness of the contention of the appellant. 12. As stated by the learned Amicus Curiae, such a cheque might Crl.A.597/2011 8 not have been issued after re-possession of the vehicle by its owner. The Ext.P8 shows that it was sold in public auction on 08.07.2007. In all probability, the vehicle must have been re-possessed by the appellant in August, 2007. Therefore, after re-possession, so long as the first respondent maintains that no amount is due to him and that he has already paid excess amount, the possibility of him reaching the office of the appellant and executing the Ext.P1 is very remote. Ext.D2 notice reinforces this contention. 13. Here the first respondent has a case that he had given a blank cheque at the time of execution of the hire purchase agreement, which has been misused by the appellant after selling the vehicle in public auction. 14. In fact, going by the recent trends in judicial pronouncements, even using such a blank cheque by incorporating the name of the payee, amount, date etc. cannot be taken as a reason for acquitting the drawer. At the same time, it is very important that the complainant has a duty to say that the transaction is genuine. Initial burden of proving the case is on him. For two reasons the genuineness of the case put forward by the appellant has to be doubted. As stated earlier, it is improbable that the first Crl.A.597/2011 9 respondent, who was the hirer, had gone to the place of the appellant and executed and issued the Ext.P1 cheque especially after the re-possession of the vehicle and selling it in public auction. 15. Secondly and more importantly, the genuineness of the Ext.P9 statement of accounts has to be doubted. I have gone through the document vis-a-vis the entries in Ext.D1 document acknowledging receipt of various instalments made by the first respondent. This document shows that eleven instalments were paid by the first respondent during the period from 17.03.2006 to 17.07.2007. They are Rs.1,092/- on 17.03.2006, Rs.2,252/- on 26.05.2006, Rs.1,119/- on 05.07.2006, Rs.1,220/- each on 11.08.2006, 27.09.2006, 02.11.2006, Rs.1,175/- on 04.01.2007, Rs.1,234/on 20.02.2007, Rs.1,201/- on 17.04.2007 and Rs.2,500/- each on 28.05.2007 and 17.07.2007. Aggregate of all these amounts comes to Rs.16,433/-. But, as stated earlier, the Ext.D1 is an admitted document. According to the learned counsel for the appellant, only an amount of Rs.13,197/- was paid by the first respondent. The trial court also reckoned only that much amount. But I find that it is an incorrect calculation. On the face of it, Ext.D1 shows that an amount of Rs.16,433/- was collected in Crl.A.597/2011 10 eleven instalments from the first respondent by the appellant. It is noticeable that the last remittance, that is Rs.2,500/- made on 17.07.2007, has not been reckoned in Ext.P9 statement of accounts. This has not been reckoned by the learned Magistrate also. In that case, the plea of the appellant will become more weak and that of the first respondent is more strong. 16. I have no doubt that **Sudha Beevi** , quoted supra, has no application since the appellant has no case that any signed blank cheque was obtained from the first respondent at the time of commencement of the transaction. It may be true that a signed blank cheque was obtained at that time. But that should not have been used by the first respondent unless a consensus was arrived between the parties with regard to the actual amount due. But it is certain that the actual remittances made by the first respondent have not been reckoned by the appellant. 17. A perusal of Ext.P9 shows that the actual consideration of the vehicle was Rs.33,900/-. It is evident from Ext.P10 also. The margin money was Rs.6,800/-. The loan amount, that is the amount actually lent by the appellant, was Rs.27,100/-. So the total amount found payable by Crl.A.597/2011 11 the first respondent was Rs.39,295/- which includes FC amount, may be financial credit amount, of Rs.12,195/-. The first respondent was liable to pay a total amount of Rs.39,295/- in 36 instalments at the rate of Rs.1092/-. The documents produced by the parties indicate that the first respondent was never regular in repayment of the amount. However, at least in alternate months he has paid amounts. Till 17.07.2007, though intermittently, he paid an amount of Rs.16,433/-, which includes the defaulted instalment interest. But the last remittance has not been reckoned by the appellant. Secondly, Rs.12,195/- shown payable by the first respondent includes interest for the entire period of 36 months, during the period of the entire hire purchase agreement. However, as rightly pointed out by the learned Magistrate, before the completion of the period, after few defaults, the appellant proceeded to re-possess the vehicle and then sold it out in auction. Though justifiable under the Ext.P7 agreement, the extreme step taken without showing any kind of indulgence, cannot be appreciated in right earnest. It is also quite patent that the entire amount remitted by the first respondent has not been reckoned by the appellant. For this reason and since there are reasons to indicate that the amount Crl.A.597/2011 12 reckoned by the appellant is incorrect and that was done behind the back of the first respondent, I am not persuaded to take the view that the Ext.P1 is supported by consideration. There is substance in the finding of the trial court that it was not supported by consideration and therefore the appellant is not entitled to draw the presumptions under Sections 118 and 139 of the Act. On consideration of the totality of circumstances and evidence, thus it is obvious that sufficient reasons are not made out by the appellant to interfere with the judgment under attack. The appellant is not entitled to succeed. The appeal lacks merit and is dismissed. Sd/- **K. HARIPAL JUDGE** okb/11.04.21 //True copy// P.S. to Judge