N.C. Balakrishnan v. P.V. Thomas @ Baby and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE ANNIE JOHN TUESDAY, THE 19TH DAY OF FEBRUARY 2019 / 30TH MAGHA, 1940 ## CRL.A.No. 823 of 2006 AGAINST THE JUDGMENT DATED 21.12.2005 IN ST 670/2003 of JUDICIAL MAGISTRATE OF FIRST CLASS -I,KOZHIKODE ## APPELLANT/COMPLAINANT: N.C.BALAKRISHNAN, S/O. GOVINDAN NAIR, PROPRIETOR, M/S. FERTILISERS INDIA, 7/97,, N.K.K.BUILDING, ARAVINDA GHOSH ROAD, CALICUT. BY ADVS. SRI.P.K.SURESH KUMAR (SR.) SRI.K.P.SUDHEER ## RESPONDENT/ACCUSED & STATE: - 1 P.V.THOMAS @ BABY, PINAKKULATH HOUSE, MANIMOOLY, NILAMBUR, MALAPPURAM DISTRICT. - 2 STATE OF KERALA REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY ADVS. SRI.P.SAMSUDIN SRI.V.RAJENDRAN SMT. SWAMIDAS K.N., PUBLIC PROSECUTOR THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 19.02.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Crl.A. No.823 of 2006 -2- ## **JUDGMENT** The first respondent is the accused in S.T. No. 670 of 2003 on the file of the Judicial First Class Magistrate Court-I, Kozhikode for offences punishable under Sections 138 and 142 of the Negotiable Instruments Act. The appellant is the complainant. 2. The case of the prosecution is as follows: 3. The appellant is a manufacturer and dealer of fertilisers doing business in the name and style of M/s. Fertilisers India. The accused had purchased fertilisers from the appellant/ complainant and issued a cheque bearing No. 039421 dated 12.12.2002 for Rs.1,87,146/- drawn on the Vazhikadavu Service Co-operative Bank Ltd. When the complainant presented the cheque for encashment through Punjab National Bank, Kozhikode Branch, the cheque was returned unpaid together with a memo dated 20.02.2003 showing the reason 'funds insufficient'. Thereafter, on 15.03.2003, the complainant issued a lawyer notice to the accused calling upon him to pay the cheque amount. On 19[th] March, 2003, the accused received notice and he sent a reply denying the allegations. Hence the complaint has been filed by the appellant. 4. The appellant was examined as PW1 and Ext.P1 to P9 were Crl.A. No.823 of 2006 -3- marked. The accused was examined as DW1 and Exts.D1 to D4 were marked. The accused denied the allegations levelled against him. 5. The learned Judicial First Class Magistrate-I, Kozhikode, as per judgment dated 21.12.2005, found the accused not guilty of the offence punishable under Section 138 of the Negotiable Instruments Act and acuqitted him under Section 255(1) Cr.P.C. Aggrieved by the same, this appeal has been filed. 6. The learned counsel for the appellant contended that the appellant was working as an agent of one Chinnan, who was the distributor of the complainant in Malappuram District. He had given one signed blank cheque each to Chinnan in 1996 and 1998 and the same was given to secure collection of sale price of the fertilisers sold on credit through the accused. The said Chinnan died subsequently. He has further contended that by misusing one of the said cheque, the complaint was filed by the appellant. According to the learned counsel, there is colour difference between the ink used for writing the cheque and signing the cheque. 7. The court below found that there is no proper complaint as per Section 142(a) of the Negotiable Instruments Act. Eventhough it was found that the complainant successfully discharged the initial burden of proving of issuance of cheque, it was found that impugned Crl.A. No.823 of 2006 -4- cheque was not issued by the accused to the complainant towards the discharge of a legally enforceable liability. Seven points were raised for the consideration and point Nos. 3, 4 and 5 were in favour of the complainant. **8.** The appellant is a proprietary concern engaged in the business of manufacture and sale of fertilisers. As per the complaint, Sri. N.C Balakrishnan is the proprietor of M/s. Fertilisers India, the appellant. Ext.P9 is the certificate of registration dated 01.03.1996 issued by the Sales Tax Department to M/s. Fertilisers India. It is also turned out from Ext.P9 that Sri. N.C. Balakrishnan is the proprietor of the appellant firm. PW1 also deposed before court that Sri. Balakrishan is the proprietor of M/s. Fertilisers India. In fact, the complaint is signed and presented by PW1, Sri. K.P. Sethunath, as the Power of Attorney Holder of Sri. N.C. Balakrishnan. Ext.P7 is the Power of Attorney Deed executed by N.C. Balakrishnan appointing PW1 as his Power of Attorney Holder. Ext.P1 is a valid document. So, it can be concluded that PW1 was appointed as the Power of Attorney Holder of Sri. N.C. Balakrishnan. 9. The question to be considered in this appeal is whether the Power of Attorney Holder can directly present the complaint before the court or whether the complaint is to be presented by the payee in Crl.A. No.823 of 2006 -5- person. 10. As per Section 142(a) of the Negotiable Instruments Act, no court shall take cognizance of any offence punishable under Section 138 of the Negotiable Instruments Act except upon a complaint in writing made by the payee or, as the case may be, the holder in due course of the cheque. It is not disputed that the appellant is the payee under Ext.P2 cheque. The appellant is a proprietary concern and therefore, the complaint shall be signed and presented by the proprietor. The present complaint is signed and presented by the Power of Attorney Holder of the proprietor. 11. The court below relied on the decisions reported in 2004(3) KLT 850 and 2005(2) KLT 1002 and found that the complaint shall be personally presented by the complainant. Presentation of complaint by the Power of Attorney Holder before the Court is not proper presentation. Accordingly, it was held that there is no proper complaint as prescribed under Section 142(a) of the NI Act. 12. The case of the complainant is that the accused had purchased fertilizers on credit and issued a cheque for Rs.1,87,146 dated 12.12.2002 towards the payment of sales consideration. Ext.P2 is the cheque said to have been issued by the accused. The appellant/complainant is shown as payee in Ext.P2 cheque, which Crl.A. No.823 of 2006 -6- contains the signature of the accused. DW1 has deposed that Ext.P2 cheque is written on a cheque leaf which was given to him from his Bank. PW1 deposed that the accused has issued Ext.P2 cheque. The court below has found that the complainant has successfully discharged his initial burden of proving issuance of the cheque. 13. The learned counsel for the appellant has placed reliance on ## _**Narayanan A.C. And another v. State of Maharashtra and others**_ [2013 (3) KHC 885], wherein it is held that a complaint under Section 138 of the Negotiable Instruments Act can be filed through power of attorney. The Power of Attorney Holder can depose and verify on oath before Court in order to prove contents of complaint. However, the Power of Attorney Holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the transactions and the complainant is further required to make specific assertion as to the knowledge of power of attorney holder in complaint. So, the findings of the court below that there is no proper complaint is not sustainable in the light of the aforesaid decision. 14. Ext.D1 is the certified copy of the judgment in C.C. No. 389 of 2001 on the file of the Judicial First Class Magistrate, Malappuram . Ext.D2 is the certified copy of the complaint in C.C. No. 389 of 2001, Crl.A. No.823 of 2006 -7- which was filed by one Chinnan against the accused on the basis of a cheque for Rs.71,936/-. From Ext.D2, it is clear that the cheque involved in that case bears No. 036201. The cheque in dispute in the case is 039421. As per Ext.P3 ledger extract, only six cheque leaves were given to the accused. So, there is vast difference in the cheque numbers in Ext. P2 cheque and the chseque involved in Ext.D2. DW1 has deposed before court that Chinnan was the distributor of the complainant in Malappuram. From Ext.D2, it is revealed that Chinnan had given Surabhi Fertilizers to the accused. So, the contention of the accused that he had given signed blank cheques as security to Chinnan when he was appointed as Sub Agent can be accepted. The court below accordingly hold that Ext.P2 cheque was not issued by the accused to the complainant towards the discharge of a legally enforceable liability. 15. PW1 has stated that the accused has not paid the cheque amount even after the service of the statutory notice. The accused has no case that he paid the cheque amount to the complainant. According to the appellant, he is not liable to pay any amount to the complainant. The court below found that the offence under Section 138 of the Negotiable Instruments Act will not be attracted as the accused has proved that Ext.P2 cheque was not issued towards the Crl.A. No.823 of 2006 -8- discharge of a legally enforceable liability. 16. It is borne out from Exts.D3 and D4 documents that Ext.P2 cheque was issued to the accused from his Bank on 09.04.1998. Ext.D3 is the ledger extract relating to account No. 3234 maintained by the accused with Vazhakkad Co-operative Bank Ltd. Ext.P2 cheque is drawn on to account No. 31234. Account No. 3234 was opened by the accused on 8.8.1995 by depositing Rs.25. Ext.D3 ledger extract contains the details of the cheques issued to the accused. Altogether six cheque leaves were issued to the accused from his Bank. Ext.D3 reveals that the accused never withdrawn cash from his account using the cheque leaves which were issued to him from his Bank. He had withdrawn cash on five occasions by using withdrawal forms and nobody except the accused had withdrawn cash from his bank account. When PW1 was asked to peruse the cheque to see whether there is any difference between the ink used for writing the contents of the cheque and signing the cheque, PW1 refused to peruse the cheque when it was shown to him. The court below found that there is colour difference between the inks used for writing the amount in Ext.P2 cheque and signing Ext.P2 cheque and accordingly it is held that Ext.P2 cheque was fabricated misusing a signed blank cheque. The court below has not considered this fact and plainly disbelieved the version Crl.A. No.823 of 2006 -9- of DW1 and ultimately found that Ext.P1 cheque was not issued by the respondent directly to the appellant towards the discharge of a legally enforceable liability. In fact, the cheque which was used for filing C.C. No. 389 of 2001 is Cheque No. 036201. Admittedly, the respondent/accused has given as per Ext.P3 ledger extract, only six cheque leaves and the disputed cheque is 039421. Six cheque leaves were given in the same serial number and it would have been numbered from 039421 to 039426. But in Ext.D2 complaint, which is the subject matter in Ext.D1 judgment in C.C. No. 389 of 2001, the cheque in dispute is 036201. There is vast difference between the cheque numbers involved in Ext.D2 complaint and Ext.P2 cheque and this fact is to be analysed by giving proper evidence before the court below. The court below has not enquired the same and ultimately found that the cheque mentioned in Ext.D2 was issued by one Chinnan to whom it was given by Surabhi Fertilizers. So, the version of the respondent/accused was believed by the court below and ultimately found that the blank signed cheques of the respondent/accused was given as security to the said Chinnan had been misused by the appellant so as to institute a criminal complaint against the respondent/accused. I do not find any merit on the findings of the courts below. I have already held that the power of attorney holder Crl.A. No.823 of 2006 -10- can institute a private complaint under Section 138 against the respondent/accused and I find force in the findings entered by the court below that proper accounts and the bills kept by the appellant has not been produced before this Court when the respondent disputed the purchase of fertilizers on credit. 17. When the execution of a cheque is admitted or proved, a presumption would arise that the cheque was issued towards the discharge of a legally enforceable liability. Then the burden is on the drawer to rebut the legal presumption by tendering evidence. The accused has given oral evidence as DW1 to prove his contention. Exts.D1 to D4 were also marked on the side of the accused. The accused has issued Ext.P8 reply notice denying the issuance of Ext.P2 cheque and the purchase of fertilizers on credit. From the material available on record, it is turned out that the complainant is producing and selling organic fertilizers under the trade name 'Surabhi Fertilizers'. The appellant/complainant has not mentioned the dates on which the accused purchased fertilizers on credit from it. PW1 deposed that the accused purchased fertilizers on credit as per two or three bills. From the evidence of PW1, it is clear that he is not fully aware of the alleged transaction between the appellant/complainant and the accused. PW1 admitted that they used to keep third copy of Crl.A. No.823 of 2006 -11- the credit bills and that they are keeping debtors account. He has also admitted that their annual account contains the details of the debtors and all those documents were admittedly in the possession of the complainant. The court below held that he ought to have produced documents at least when the accused disputed the purchase of fertilizers on credit. **18.** Therefore, I find it is just and proper to remand the matter to the court below for consideration regarding the accounts kept by him related to the purchase of fertilizers by his firm so as to establish that Ext.P2 cheque was given for legally dischargeable debt. For that purpose, the matter is remitted to the court below for considering afresh with regard to the findings entered above and the court below shall dispose of the same within two months from the date of receipt of a copy of this judgment. The parties are at liberty to adduce further evidence in the case. This appeal is disposed of as above **.** **-** sd/ **ANNIE JOHN, JUDGE.** _Rv_ Crl.A. No.823 of 2006 -12-