S. Krishnakumar v. James Philip Ancheryil Agencies, Furniture Mart, Puthuppally, Nilakkalpally, Kottayam; State of Kerala

## IN THE HIGH COURT OF KERALA AT ERNAKULAM ## PRESENT ## THE HONOURABLE MRS. JUSTICE ANNIE JOHN MONDAY, THE 28TH DAY OF OCTOBER 2019 / 6TH KARTHIKA, 1941 ## CRL.A.No.1716 OF 2007 AGAINST THE JUDGMENT IN ST 1092/2005 DATED 12-03-2007 OF JUDICIAL MAGISTRATE OF FIRST CLASS -II,PATHANAMTHITTA ## PETITIONER/APPELLANT/COMPLAINANT: S.KRISHNAKUMAR KOTTAICKATTU HOUSE, AZHOOR, PATHANAMTHITTA. BY ADV. SRI.S.MUHAMMED HANEEFF ## RESPONDENT/RESPONDENTS/ACCUSED: 1 JAMES PHILIP ANCHERIYIL AGENCIES, FURNITURE MART, PUTHUPPALLY,, NILAKKALPALLY, KOTTAYAM. 2 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR,, HIGH COURT OF KERALA, ERNAKULAM. R1 BY ADV. SRI.SOORAJ SUKUMARAN R1 BY ADV. SRI.TITUS MANI ## SRI. B JAYASURYA, PUBLIC PROSECUTOR THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 28.10.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Crl. Appeal No.1716/2007 -2- ## **JUDGMENT** The appellant is the complainant in S.T. No. 1092 of 2005 on the files of the Judicial First Class Magistrate-II, Pathanamthitta. The first respondent is the accused and the complaint was filed under Section 138 of the Negotiable Instruments Act. 2. The allegation is that in discharge of a liability, the first respondent has issued a cheque for an amount of Rs.25,000/- on 24.08.2005 and on presenting the same, it was dishonoured stating that 'account closed'. Eventhough the appellant issued a lawyer notice on 13.09.2005, the first respondent neither send any reply nor paid any amount. Hence, complaint has been filed. 3. The accused entered appearance and he denied the charges levelled against him. On the side of the appellant, PW1 was examined and Exts.P1 to P5 were marked. On the side of the accused, DWs 1 and 2 were examined and Exts.D1 to D8 were marked. 4. The learned Magistrate, after trial as per judgment dated 12.03.2007, dismissed the case holding that the complainant failed to prove that Ext.P1 cheque was issued by the accused to him in discharge of a legally dischargeable debt. Aggrieved by the same, this appeal is filed. 5. The learned counsel for the appellant has argued that the appellant/complainant has successfully proved the issuance of cheque, Crl. Appeal No.1716/2007 -3- its dishonour, issuance of statutory notice and the failure of the accused to pay the amount and he complied with the statutory requirements and therefore, he is legally entitled to get the presumptions under Sections 118 and 139 of the NI Act. He has, therefore, agreed that once the execution of cheque is proved, then the burden is on the other side to rebut the presumptions under Section 139 of the NI Act and that since the accused person did not send any reply notice to the statutory notice, the contention taken in the defence that the entries made in the cheque except the signature is not his own, should have been discarded by the learned Magistrate. The case of the appellant is that the first respondent has issued a cheque for Rs.25,000/- in discharge of the liability on 24.08.2005. He has produced the same before the Kanjikuzhy Branch of the Federal Bank. But, it was dishonoured due to the reason that 'account closed' and he received a memo dated 30.08.2005. The appellant issued a registered demand notice on 13.09.2005 calling upon the accused to pay the amount covered by the said dishonuored cheque. The first respondent received notice on 19.09.2005. But, he failed to repay the amount. In fact, those facts were not disputed by the first respondent. But, his case is that he has not issued such a cheque in favour of the appellant or he has not borrowed Rs.25,000/- as stated by the appellant. Ext.P1 is the cheque issued by the first respondent to the appellant. Crl. Appeal No.1716/2007 -4- Ext.P2 is the memo received by the appellant stating that the 'account closed'. Ext.P3 is the copy of the lawyer notice. Ext.P4 is the postal receipt and Ext.P5 is the acknowledgment card issued. The case advanced by the first respondent while cross examining PW1 is that PW1 managed to obtain the blank signed cheque issued to NKR Chitty Funds, Pathanamthitta as a security at the time of accepting the prize money of a chitty with the said Chitty Funds and filed the case against him. According to him, he never issued Ext.P1 cheque to the appellant/complainant or borrowed any amount from him. But, the above suggestions were denied by PW1. According to the first respondent, the said blank cheques were handed over to the appellant by the Chitty Company and a false case was filed against the appellant by causing material alterations. In order to establish this fact, the first respondent was examined as PW2. He has deposed that he had conducted a garment business till 31.12.2004 and he never conducted a furniture business. He had no transaction with the appellant and he has not issued any cheque to him. According to him, he has seen the appellant for the first time in court. Over and above, he has given evidence to the effect that he was a subscriber to the chitty conducted by the 'NKR Chitty Fund' at Pathanamthitta and issued a signed blank cheque as security, while he was receiving the prize money of a chitty with the above chitty fund. He has produced Ext.P3 certificate issued Crl. Appeal No.1716/2007 -5- from the Panchayat to him for conducting a garment business. DW1 is the Manager of the drawee bank and Ext.D1 is the account extract of the accused which was produced to show that the account from which Ext.P1 cheque was drawn was closed on 09.07.2004. Ext.D2 is the account opening form. So, as per the evidence of DW1 and from Ext.D1, it is proved that the account of the first respondent was closed on 09.07.2004. The disputed cheque was alleged to have given to the appellant on 24.08.2005. It is the definite case of the appellant that the first respondent has borrowed Rs.25,000/- and in discharge of the said liability, he has issued Ext.P1 cheque. But, during cross examination of the appellant, it was revealed that the accused had issued a blank signed cheque to him and as instructed by the accused the appellant himself filled up the other entries such as his name, amount and date and thereafter, the cheque was sent for collection. He has further deposed that at the time of issuing the cheque, the accused had given oral permission to him to fill up the cheque for a sum of Rs.25,000/-. According to the appellant, the first respondent borrowed Rs.25,000/from him on a day in July, 2005 and agreed to repay the amount in a month and the said amount was lent not for interest. The learned counsel for the appellant argued that whenever a blank signed cheque is issued, an implied authority is given to the person to whom it is issued, to fill it up at the appropriate stage, with necessary entries regarding the Crl. Appeal No.1716/2007 -6- liability and present it to the Bank and therefore, the first respondent cannot be absolved from the liability in the event of dishonour. To support the said contention, he has placed reliance on _**Moitheen v. Johny**_ [2006 (3) KLJ 48]. While the appellant was in box, he has admitted that he has filled up all the entries in Ext.P1 and presented it for collection of the amount. In fact, the amount was admittedly given in July, 2005 and the cheque was issued on 24.08.2005. The date of borrowal of Rs.25,000/- by the first respondent is not stated in the petition and therefore, it would show that the appellant has no specific case regarding the borrowal of the amount by the first respondent. When the first respondent has denied the transaction, the burden is heavy on the appellant to establish that Ext.P1 is duly executed by the first respondent and handed over to him for realisation of Rs.25,000/-. But, absolutely, no evidence was adduced by the appellant to establish this fact and therefore, I find that the case advanced by the defence side is more probable than the evidence adduced by the appellant. Here, the first respondent has denied handing over of Ext.P1 cheque to the appellant. According to him, he has given cheque to NKR Chitty Funds at the time when he has received prize money from the company. The case advanced by the appellant is that once the execution of the cheque is proved, then the presumption under Sections 118 and 139 of the NI Act will come into play. But, in this case, the appellant admitted that he Crl. Appeal No.1716/2007 -7- has filled up the entries in Ext.P1 cheque before the presentation of the same before the Bank. Further, the cheque alleged to have issued relates to an account which was closed by the first respondent prior to the transaction. Section 139 does not permit the court to presume that the cheque, whether a blank one or not, is executed in discharge of debt or liability. It is well settled fact that the court cannot draw any presumption that the cheque was issued/executed by virtue of the presumption under Section 139 of the NI Act, even if the signature in the cheque is admitted. When the accused raised a plea that the cheque was a signed blank cheque, the court has to analyse the entire evidence and materials placed before it and decide whether the complainant proved that the accused had drawn a cheque of the nature defined under the NI Act or whether it was a blank signed cheque, which does not satisfy the description of a cheque under the Act, when it was handed over. In the instant case, the first respondent has denied the execution of Ext.P1 cheque. It is important to note that at the time of giving evidence, the appellant had deviated from his case in the complaint and proof affidavit and he set up another case that the first respondent handed over a blank signed cheque and gave permission to fill up a cheque for Rs.25,000/-. It is also important to note that whenever a blank cheque is drawn towards liability or even as security, when the liability is assessed and quantified, if the cheque is filled up and Crl. Appeal No.1716/2007 -8- presented to the bank, the person who had drawn the cheque cannot avoid the criminal liability under Section 138 of the NI Act. The specific case of the appellant is that the amount was lent not for interest. So, there is no necessity for quantifying or assessing any amount in future so that the first respondent ought not to have given a signed blank cheque to the appellant. Further, the first respondent had alleged to have borrowed amount in June, 2005; but the cheque was given subsequent to that. If he had not given the cheque for interest, definitely he would have filled up the cheque at the time of receipt of the same from the first respondent. If the amount of Rs.25,000/- was given to the first respondent, he would have received the cheque for Rs.25,000/-. The appellant has failed to prove the circumstances under which the blank signed cheque was alleged to have issued by the first respondent to him. It is true that the first respondent, in spite of receipt of statutory notice, failed to send any reply to the appellant setting forth his defence. The definite case of the first respondent is that a blank signed cheque issued to a chitty company was reached in the hands of the appellant and he has filed a false case against him after subjecting the cheque to material alteration and the case advanced by the respondent is more probable than the case advanced by the appellant. The failure on the part of the first respondent in not sending any reply notice is not sufficient to sustain the complaint against the first Crl. Appeal No.1716/2007 -9- respondent. The evidence adduced by PW1 is not consistent with his pleadings. Therefore, it is quite unbelievable that Ext.P1 cheque was given for a legally dischargeable debt as prayed for by the appellant. The appeal fails and the same is liable to be dismissed. In the result, this appeal is dismissed. sd/- **ANNIE JOHN, JUDGE.** _Rv_ Crl. Appeal No.1716/2007 -10-