P.K. Aravindakshan v. K.T. Raveendran & State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE V.G.ARUN** **TUESDAY, THE 21[ST] DAY OF MARCH 2023 / 30TH PHALGUNA, 1944** **CRL.A NO. 1168 OF 2016** **AGAINST THE ORDER/JUDGMENT ST 9105/2011 OF JUDICIAL MAGISTRATE OF FIRST CLASS -II(MOBILE)KOZHIKODE Crl.L.P. 367/2016 OF HIGH COURT OF KERALA** ## **APPELLANT/COMPLAINANT:** P.K.ARAVINDAKSHAN AGED 57 YEARS S/O. A.K.K.NAMBIAR, AGED 57 YEARS, RESIDING AT HARSHA, CHUNGAM FEROKE COLLEGE ROAD,FEROKE, KOZHIKODE. BY ADV SRI.AVM.SALAHUDIN ## **RESPONDENTS/ACCUSED & STATE:** 1 K.T.RAVEENDRAN AGED 62 YEARS S/O. GOVINDAN, AGED 62 YEARS,RETEK CYBER COLLEGE NEAR POST OFFICE,FEROKE, NOW RESIDING AT PUNATHUM PADIKKAL HOUSE, EDAKAD POST, WEST HILL, CALICUT - 673 005. 2 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR,HIGH COURT OF KERALA, ERNAKULAM,COCHIN - 31. BY ADV SRI.R.BINDU (SASTHAMANGALAM) ## **OTHER PRESENT:** SR.PP. RENJITH GEORGE THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 15.03.2023, THE COURT ON 21.03.2023 DELIVERED THE FOLLOWING: Crl.A. 1168/2016 2 ## **JUDGMENT** Dated this the 21[st] day of March, 2023 The appellant was the complainant in S.T. No. 9105 of 2011 of the Judicial First Class Magistrate Court-II, Kozhikode. The complaint was filed alleging commission of offence under Section 138 of the Negotiable Instruments Act by the first respondent. The essential averments in the complaint are to the following effect; The complainant and the accused were known to each other for many years. In the first week of January, 2008, the accused requested for a loan of Rs. 2,50,000/- in order to expand the activities of his institution by name Retek Cyber College. After some deliberations, the complainant lent a sum of Rs.1,75,000/- to the accused on 31.1.2008. The accused promised to repay the amount with 7.5% interest whenever demanded and executed Ext. P1 promissory note as security. Although complainant demanded to return the amount with interest, the accused did not accede to the request and instead Crl.A. 1168/2016 3 issued Ext.P3 cheque dated 24.07.2010 for Rs.2 Lakhs towards partial discharge of the amount due towards principal and interest. The cheque, on presentation, was dishonoured for insufficiency of funds in the account of the accused. Although legal notice was sent demanding payment of the amount, notice was returned with the endorsement the accused 'refused' '. 2. In order to prove his case, the appellant gave evidence as PW 1 and marked Exts. P1 to P8. No evidence, either oral or documentary, was adduced on the defence side. The first respondent denied the incriminating circumstances brought out against him during his Section 313 examination and additionally filed a statement putting forth a defence that earlier he had borrowed Rs.75,000/- from the appellant and at that time, had given a signed cheque as security. Even after repaying the amount with interest, the cheque given as security was not returned, but was later presented by entering an amount of Rs.2,00,000/-. 3. The trial court found the available evidence to be insufficient to prove execution of Ext.P1 promissory note and Crl.A. 1168/2016 4 Ext.P3 cheque. Reliance was placed on certain suspicious circumstances brought out during the cross examination of the appellant to doubt the genuineness of the complainant's case. Based on those findings, the first respondent was acquitted as per Section 255(1) Cr.P.C. Hence, this appeal. 4. Heard Adv. A.V.M. Salahuddeen for the appellant and Adv.R. Bindu (Sasthamangalam) for the first respondent. 5. Learned Counsel for the appellant contended that the findings of the trial court is against the settled legal position that once issuance of the cheque and execution is proved, the presumption under Section 139 of N.I Act will be attracted and thereupon, it is for the accused to rebut that presumption. Surprisingly in the instant case, in spite of proving the issuance of cheque and the attendant circumstances, the trial court proceeded to acquit the accused based on surmises and conjectures. The trial court failed to take note of the pertinent fact that the accused had not sent reply to the statutory notice and had not let in any evidence to rebut the presumption. 6. Learned counsel for the first respondent submitted that, being an appeal against acquittal, this Court should not Crl.A. 1168/2016 5 interfere with the trial court's judgment, even if a different view is possible. It is contended that, apart from the findings of the trial court, yet another crucial aspect is the failure of the complainant to prove that statutory notice was served on the accused. In elaboration of this contention it is submitted that, the accused had sold his institution, Retek Cyber College, to third parties on 07.07.2010. The statutory notice was sent to the accused in his institution address only on 06.08.2010. During cross examination, the complainant admitted that he was aware of the sale. In such circumstances, the complainant is bound to prove that the notice was properly served. In support of this contention, reliance is placed on the decisions in **Vinod Shivappa v. Nanda Belliappa** [(2006) 6 SCC 456], **Padmanabhan v. Vasudevan Namboodiri** (2010 (3) KLT 216) and **Usman M v. M.P. Muhammed Ali and Another** (2017 (4) KHC 565). It is further contended that, failure of the complainant to examine any independent witness to the transaction and execution of Ext. P1 promissory note, along with the inconsistencies in the evidence of the complainant had prompted the trial court to reach the correct conclusion Crl.A. 1168/2016 6 that execution of the cheque was not proved. As such, no interference is warranted with the well considered judgment. 7. I fail to understand as to how, despite proof regarding the essential ingredients like, issuance of the cheque, return of the cheque for insufficiency of funds and issuance of statutory notice demanding payment, the trial court could have held that, the execution of the cheque is not proved. Pertinently, except putting a few vague questions to the effect that Ext. P3 cheque was issued when the accused borrowed an amount of Rs. 75,000/- and that cheque was illegally retained by the complainant, in spite of repaying the amount, no effort is seen taken to substantiate the defence. The accused has no case that he had made a written demand for return of the cheque or had lodged a complaint before the police about illegal retention of the cheque. No evidence is produced regarding receipt of Rs. 75,000/- or repayment of that amount. On the other hand, the complainant mounted the box and marked necessary documents, including his account statement which proved that the complainant had sufficient funds in his account and had withdrawn an amount of Rs.3,50,000/-, prior to the Crl.A. 1168/2016 7 date on which Rs.1,75,000/- was advanced to the accused. In such circumstances, it is preposterous to hold the complainant to have failed to prove the execution of the cheque. In this context, it will be beneficial to read the following observation of the Apex Court in **Bir Singh v. Mukesh Kumar** [(2019) 4 SCC 197]. “It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent-accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. ## Recently, in **Shaji K.J. v. Thodupuzha Primary CoOperative Agriculture and Rural Development Bank Ltd.** **No. 4388 and Another** (2017 KHC 867), this court, after detailed survey of precedents, expressed the following opinion; “14. Therefore it has been by now well established that where a signed blank cheque leaf is voluntarily given by the drawer / account holder to the other party, and whereby implied the same according to the whim and quantify the liability at the Crl.A. 1168/2016 8 appropriate time and then fill up the same and present it for collection etc., then S.20 and S.87 of NI Act will have no or explicit authority is given to other party to application to the fact of such a case. It will all depend upon the fact of the case whether blank signed cheque leaf was given voluntarily by the drawer / account holder to the proposed payee, and whether implicit or explicit authority as been given by the drawer to the other party to quantify the liability and to Il up the cheque at the appropriate time etc.” Therefore the reasoning adopted by the trial court for finding against the complainant on the aspect of execution of Ext.P3 cheque is found to be unsustainable. Consequently, the benefit of the presumption under Section 139 is available to the complainant. 8. Having found the presumption under Section 139 attracted, the next question is whether the accused had succeeded in rebutting the presumption. In the absence of a reply notice, the defence of the accused came to light only during cross examination of PW1 and his Section 313 statement. A careful scrutiny of PW 1's evidence and the statement under Section 313 Cr.P.C. reveals that the attempt of the accused was to make it appear that Ext.P3 is a cheque Crl.A. 1168/2016 9 given as security to the complainant when the accused borrowed Rs.75,000/- on an earlier occasion. As discussed earlier, other than a half hearted attempt to set up such a defence, nothing further was done by the accused. I am also of the definite opinion that the assumptions and inconsistencies relied on by the court below, are not sufficient to rebut the presumption under Section 139. 9. The contention of the accused that the statutory notice was not served on him, as he had sold the premises to which the notice was sent cannot be accepted, since the notice was returned as 'unclaimed',. It is settled law that notice returned as unclaimed are presumed to have been served. The decisions relied on by the counsel for the accused are therefore not applicable to the facts of this case. Moreover, Ext. P8 document under which the institution was sold, does not contain any clause which require the seller to hand over possession and vacate the premises to the buyer immediately. On the other hand, the document contains a clause conferring three months' time to the seller to carry out his obligations. As such, the contention that the accused was Crl.A. 1168/2016 10 not available at the address to which the notice was sent cannot also be countenanced. In the light of the above findings, the impugned judgment is set aside. Consequently the accused is found guilty and is convicted of the offence under Section 138 of the Negotiable Instruments Act. Taking into account the fact that more than 12 years have elapsed after issuance of the cheque and calculating interest at the minimum rate, the accused is sentenced to pay a fine of Rs. 3,00,000/- (Rupees three lakhs only) with default sentence of simple imprisonment for two months. The fine amount, if realized, shall be paid to the complainant as compensation under Section 357(1) Cr.P.C. The accused is granted time till 30.06.2023 for depositing the fine amount. Sd/- ## **V.G.ARUN** ## **JUDGE** sb