Purnima Distributors v. M.P. Thimmappa and State of Kerala

Crl.A.No.944/2017 1 _IN THE HIGH COURT OF KERALA AT ERNAKULAM_ _PRESENT_ _THE HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A. WEDNESDAY, THE 12[TH] DAY OF JANUARY 2022 / 22ND POUSHA, 1943_ ## _CRL.A NO. 944 OF 2017_ _AGAINST THE ORDER/JUDGMENT IN ST 7148/2011 OF JUDICIAL MAGISTRATE OF FIRST CLASS -III(MOBILE),EKM OTHERS 398/2017 OF HIGH COURT OF KERALA_ ## _APPELLANT/COMPLAINANT:_ _M/S.PURNIMA DISTRIBUTORS, XL/1736, BROADWAY P.O, LINK ROAD, ERNAKULAM–35, REPRESENTED BY ITS POWER OF ATTORNEY HOLDER JUNU GEORGE, S/O.LATE M.V GEORGE, AGED 41, SENIOR MANAGER, DD VASTHRAMAHAL, MARKET ROAD, COCHIN - 31. BY ADVS. SRI.SHIJU VARGHESE SRI.PRAMOJ ABRAHAM_ ## _RESPONDENTS/ACCUSED:_ _1 M.P.THIMMAPPA, S/O.PADMAYYA, PROPRIETOR, M/S. COASTAL IMPEX, SURANJANA R. MADHAVAN NAIR ROAD, RAVIPURAM, KOCHI - 16. 2 STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HONOURABLE HIGH COURT OF KERALA, ERNAKULAM. BY ADVS. SRI.IYPE JOSEPH SRI.AYPE JOSEPH R2 BY SUDHEER GOPALAKRISHNAN-PUBLIC PROSECUTOR_ _THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 29.11.2021, THE COURT ON 12.01.2022 DELIVERED THE FOLLOWING:_ Crl.A.No.944/2017 2 ## **ZIYAD RAHMAN A.A, J.** -------------------------------------------------------Crl.A.No.944 of 2017 ---------------------------------------------Dated this the 12[th] day of January, 2022 ## **J U D G M E N T** The appellant herein is the complainant in S.T.No.7148 of 2011 on the file of the Judicial First Class Magistrate Court-II, Ernakulam. The aforesaid complaint was submitted by the complainant against the 1[st] respondent herein, for the offences punishable under Section 138 of the Negotiable Instruments Act. 2. The averments in the complaint is as follows: The appellant is a partnership firm engaged in the business of sale of various kinds of paper products. The 1[st] respondent/ accused used to purchase various products from the appellants herein. The aforesaid purchases are used to be made by the 1[st] respondent on credit basis. Towards the value of goods so purchased on credit basis, the 1[st] Crl.A.No.944/2017 3 respondent issued a cheque for Rs.6,68,318/- and on presentation of the said cheque, it was returned by the bank on the reason “funds insufficient”. Statutory notice was sent to the 1[st] respondent on 08.03.2011. The 1[st] respondent did not pay the cheque amount but sent a reply notice stating that the cheque was issued as security for the transaction with the appellant. The complaint was submitted in the above circumstances. 3. In support of the contentions of the appellant, the power of attorney holder of the appellant was examined as PW1 and documents Exts.P1 to P8 were marked. After closure of the prosecution evidence, the 1[st] respondent accused was examined under Section 313 Cr.P.C, during the course of which incriminating materials brought out in the trial against him were put to him which he denied. No defence evidence was adduced by the 1[st] respondent. 4. After the trial, the learned Magistrate found that the offences under Section 138 of the Negotiable Crl.A.No.944/2017 4 Instruments Act is not made out and accordingly, the 1[st] respondent was acquitted. This appeal is filed in the above circumstances. 5. Heard Sri.Shiju Varghese, learned counsel for the petitioner, Sri.Aype Joseph, learned counsel for the 1[st] respondent and Sri.Sudheer Gopalakrishnan, learned Public Prosecutor for the State. 6. The learned counsel for the appellant contends that the judgment passed by the learned Magistrate is liable to be interfered with, as the reasons cited for dismissing the complaint are not legally sustainable. The learned counsel specifically referred to various documents produced by him, particularly, Exts.P6 and P7 ledger extract which would indicate the entire transactions between the parties. It was also pointed out that in Ext.P7, the 1[st] respondent has affixed his signature acknowledging the liability. It was contended that, the trial court rejected the contentions of the appellant, without considering any of Crl.A.No.944/2017 5 the said materials. In such circumstances, the learned counsel prays for setting aside the impugned judgment and allowing the complaint by imposing proper punishment to the 1[st] respondent herein. 7. On the other hand, the learned counsel for the 1[st] respondent would contend that the learned Magistrate passed a reasoned order by specifically referring to all the materials produced before the court. None of the said findings are unsustainable and no interference is warranted. 8. On going through the findings entered into by the learned Magistrate, it can be seen that one of the reasons for dismissing the complaint was that the Power of Attorney which is marked as Ext.P8 was not a proper one. It was also found that PW1, Power of Attorney holder, even though stated that, he was working therein for the past 25 years, was not aware of the transactions of the 1[st] respondent with the appellant, partnership firm. However, from the perusal Crl.A.No.944/2017 6 of the deposition of PW1, it can be seen that the aforesaid finding is not correct. He denied the suggestion put forward by the learned counsel for the 1[st] respondent during the course of examination that, he was not having direct knowledge of the said transactions. In chief affidavit submitted by PW1, he asserted his personal knowledge as well. Apart from the above, with regard to Ext.P8 power of attorney, even though several questions were asked by the learned counsel for the accused, challenging the authority of PW1, it is seen that, while the 1[st] respondent/accused was asked about the said power of attorney during his examination under Section 313 of Cr.P.C, he admitted the aforesaid power of attorney. Therefore, the challenge against the authority of PW1 in filing the complaint is not legally sustainable. 9. Another ground on which the learned Magistrate found the 1[st] respondent not guilty is that, the legal notice issued to the complainant does not contain the details of Crl.A.No.944/2017 7 the transaction between the parties. It was also contended that in the legal notice and the complaint, it was only stated that the accused, 1[st] respondent used to purchase rawmaterials from the appellant on credit basis and incurred a liability of Rs.6,68,318/- in discharge of his liability. However, in **Basheer K.V v. C.K.Usman Koya and Another [2021(2) KLT 567]** , a Division Bench of this Court considered this question and it has been clearly held that it is not required to disclose full details of the transaction in the statutory notice. In the light of the same, that finding is also not legally sustainable. 10. Another ground of dismissal was that the signature and the other entries in the cheque were seen entered into in different inks and from the same, the conclusion that was arrived at by the learned Magistrate is that, it was not the 1[st] respondent who wrote the amount and date shown in the cheque and hence the execution of cheque is not proved. However, the aforesaid finding is also not legally Crl.A.No.944/2017 8 sustainable in the light of the judgment rendered in the Honourable Supreme Court in **Bir Singh v. Mukesh Kumar (AIR 2019 SC 2446)** . In the said judgment, it was held as follows: “A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, S.20, S.87 and S.139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is Crl.A.No.944/2017 9 towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. In the absence of any finding that the cheque in question was not signed by the respondent-accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellant-complainant, it may reasonably be presumed that the cheque was filled in by the appellant-complainant being the payee in the presence of the respondentaccused being the drawer, at his request and/or with his acquiescence. The subsequent filling in of an unfilled signed cheque is not an alteration.” In the light of the principles laid down in the said judgment, once the accused admits the signature, the fact that the other entries contained therein are in different hand writing or ink, is not very much material. 11. Another serious dispute is relating to the existence of a legally enforceable debt. The learned Crl.A.No.944/2017 10 counsel for the 1[st] respondent seriously disputes the existence of legally enforceable debt. The learned counsel for the 1[st] respondent brought my attention to Exts.P6 and P7 ledger extracts in respect of the transaction between the parties by relying upon the said documents, it is contended that though both the said ledger extracts are pertaining to the very same transaction, the amounts shown therein are at variance which creates clear shadow of doubt to the prosecution case. 12. On examination of Ext.P7, it can be seen that, the total amount mentioned therein is Rs.5,77,028/-, which is the amount shown as arrears payable by the 1[st] respondent to the appellant. The aforesaid documents contained a signature and seal of the proprietary concern of the 1[st] respondent herein. The learned counsel for the 1[st] respondent would seriously dispute the signature contained therein by pointing out that the aforesaid signature is completely at variance with the signature of the 1[st] Crl.A.No.944/2017 11 respondent as contained in Ext.P1 cheque. It was also pointed out that, when the entries contained in Ext.P6 are examined, it can be seen that the amount mentioned therein is Rs.6,68,318/-, which is the amount shown in the cheque. The aforesaid amount is completely at variance with the amount shown in Ext.P7 ledger extract. By relying upon the same, it is contended that, the appellant does not have a consistent case as to the exact amount legally payable by the 1[st] respondent herein. When considering the entries contained in Exts.P6 and P7, I find some force in the contention put forward by the learned counsel for the 1[st] respondent. In the entries contained in Ext.P7, the total amount mentioned is Rs.5,77,028/- and it is for the transaction as on 31.01.2011. On the other hand, the amount mentioned in Ext P6 contains certain other entries for the period up to 04.03.2011. However, in the entry in respect of 02.03.2011, it is shown that an amount of Rs.91,290/- has been added to the arrears of the 1[st] Crl.A.No.944/2017 12 respondent, as interest at the rate of 24%. However, any of the documents produced by the appellant or the averments in complaint or the evidence of PW1 would not indicate any authority enabling the appellant to collect the interest for the transaction at the rate of 24% per annum. It is a well settled position of law that, once the execution of the cheque is admitted, there is presumption under Section 139 of the Negotiable Instruments Act as to the existence of legally enforceable debt. However, the said presumption is a rebutable presumption and if the accused is able to show from the evidence that the amount mentioned in the cheque does not reflect the actual amount legally due to the complainant, the said presumption shall stand rebutted. In such event, the burden to establish the existence of a legally enforceable debt shall stand shifted to the complainant. In this case, by virtue of the difference in the amount presumably due to the addition made by the appellant towards interest at the rate of 24%, there is a Crl.A.No.944/2017 13 shifting of burden as mentioned above. This is particularly because, when the appellant is charging interest at the rate of 24%, he has a duty to produce supporting documents indicating that there was an understanding between the parties, which enabled the appellant to collect the interest at the rate of 24%, for the amounts that has become in arrears. In this case, even though the 1[st] respondent is admitting the business transactions with the complainant, he vehemently denied the existence of a legally enforceable debt by a specific plea that the cheque which was issued by him towards security and the same was used by the petitioner for submitting this complaint. In such circumstances, in the absence of any specific understanding arrived at between the parties enabling the appellant to collect interest at the rate of 24%, it cannot be concluded that the amount mentioned in Ext.P1 cheque reflects the actual amount of legally enforceable debt. In such circumstances, it cannot be safely concluded that the Crl.A.No.944/2017 14 offence under Section 138 of the Negotiable Instruments Act has been made out. 13. It is also a relevant aspect in this regard that, in **K.Prakashan v. P.K.Surendran [2007 (4) KLT 502],** the Honourable Supreme Court after referring to the judgment in **M.S.Narayana Menon alias Mani v. State of Kerala and Another [(2006) 6 SCC 393]** , it was observed as follows: “It is now trite that if two views are possible, the appellant court shall not reverse a judgment of acquittal only because another view is possible to be taken. The appellate courts jurisdiction to interfere is limited. [See M.S. Narayana Menon (supra) and Mahadeo Laxman Sarane & Anr. v. State of Maharashtra, 2007 (7) SCALE 137] The High Court furthermore has not met the reasons of the learned Trial Judge. It proceeded on the premise that the appellant had not been able to discharge his burden of proof in terms of Section 139 of the Act without posing unto itself a further question as to how the said burden of proof can be discharged. It furthermore did not take into consideration the legal principle that Crl.A.No.944/2017 15 the standard of proof upon a prosecution and upon an accused is different. ” 14. In the light of the above, interference in an order of acquittal is to be made only in exceptional circumstances, by the appellate court. In this case, in the light of the findings I have arrived at in the above paragraphs, I am of the view that, no such exceptional circumstance is in existence warranting interference in the order of acquittal passed by the learned Magistrate in this case. In such circumstances, I do not find any merit in the appeal and accordingly this Criminal Appeal is dismissed. Sd/- **ZIYAD RAHMAN A.A. JUDGE** DG Crl.A.No.944/2017 16 ## _APPENDIX_ |_PETITIONERS’ _|_EXHIBITS:_| |---|---| |_ANNEXURE A:_|_TRUE COPY OF THE CERTIFIED COPY OF_| ||_EXT.P1 CHEQUE DATED 03.03.2011._| |_ANNEXURE B:_|_TRUE COPY OF THE CERTIFIED COPY OF_| ||_EXT.P2 CHEQUE DISHONOUR MEMO DATED 4.3.2011._| |_ANNEXURE C:_|_TRUE COPY OF THE CERTIFIED COPY OF_| ||_EXT.P3 LAWYER NOTICE DATED 8.3.2011._| |_ANNEXURE D:_|_TRUE COPY OF THE CERTIFIED COPY OF_| ||_EXT.P4 ACKNOWLEDGMENT CARD DATED 10.03.2011._| |_ANNEXURE E:_|_TRUE COPY OF THE CERTIFIED COPY OF_| ||_EXT.P5 REPLY NOTICE DATED 21.03.2011._| |_ANNEXURE F:_|_TRUE COPY OF THE CERTIFIED COPY OF_| ||_EXT.P6 LEDGER EXTRACT DATED 1.4.2010 TO_| ||_31.03.2011._| |_ANNEXURE G:_|_TRUE COPY OF THE CERTIFIED COPY OF_| ||_EXT.P7 LEDGER EXTRACT DATED 1.4.2009 TO_| ||_31.3.2010._| |_ANNEXURE H:_|_TRUE COPY OF THE CERTIFIED COPY OF_| ||_DEPOSITION OF PW1 WITH PROOF AFFIDAVIT AND_| ||_CROSS EXAMINATION DATED 24.1.2015._| |_ANNEXURE I:_|_TRUE COPY OF THE CERTIFIED COPY OF_| ||_313 STATEMENT OF THE ACCUSED DATED_| ||_21.02.2015._| |_ANNEXURE J:_|_TRUE COPY OF THE CERTIFIED COPY OF_| ||_COMPLAINT IN S.T.NO.7148/2011 DATED_| ||_1.4.2011._|