High Court of KeralaSingle Judge2012-02-07Appeal allowed; lower court’s acquittal set asi...

SHAJI K. ISHARA v. B.MADHU and STATE OF KERALA

Case / Petition Number:CRL.A.No. 1900 of 2005

Neutral Citation:/null

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. Q. Barkath Ali
Judgment Date: 2012-02-07
Court Decision / Holding: Appeal allowed. The judgment of the lower court acquitting the accused is set aside. The accused is convicted under Section 138 of the NI Act and is sentenced to pay a compensation of Rs. 1,00,000 to the complainant, with default simple imprisonment for three months. Two months’ time is granted for payment of the compensation.
Final Disposition: Appeal allowed; lower court’s acquittal set aside; convicted under Section 138 NI Act; compensation of Rs. 1,00,000 with default three months’ imprisonment; two months to pay compensation.

Parties to the Case

Appellants / Petitioners

SHAJI K. ISHARA

Respondents

B. MADHU
STATE OF KERALA

Legal Representation & Advocates

Counsels for Petitioners

• Sri D. Kishore

Counsels for Respondents

• Sri V. Vijulal
• Sri R. T. Pradeep
• Public Prosecutor Sri Noushad Thottathil

Case Synopsis & Summary

Shaji K. Ishara, the complainant in C.C. No. 439 of 2003 before the Chief Judicial Magistrate, Thiruvananthapuram, filed a prosecution under Section 138 of the Negotiable Instruments Act. The case arose from a loan of Rs. 1,00,000 allegedly advanced by the complainant to the accused, who issued Ext. P1, a cheque dated October 15, 2003, in discharge of that liability. The cheque was dishonoured because of insufficient funds, and notice Ext. P4 dated November 6, 2003 was sent but repayment did not occur. The trial court dismissed the complaint, holding that the complainant failed to prove the loan and the issuing of Ext. P1. On appeal, the appellant contends that the accused’ defence—that he had given a signed blank cheque to Ravindran, a colleague, who helped obtain Rs. 30,000 and allegedly misused the cheque Ext. P1—creates a plausible version; Ravindran was not examined. The appellant argues that two Supreme Court decisions, Sanalkumar v. Rajjevkumar and General Auto Sales v. Vijayalakshmi, establish that a cheque given as security or blank at the time of loan can still attract Section 138 NI Act when subsequently filled and presented. The court accepts that the trial court erred in rejecting PW1’s evidence, holds that the accused borrowed Rs.1,00,000 and issued Ext. P1, dishonoured on presentation, and sustains a conviction under Section 138 NI Act. The appeal is thus allowed.

Provisions of Law Cited

Section 138 of the Negotiable Instruments ActSection 313 of the Code of Criminal Procedure

Legal Doctrines & Maxims

A cheque given as security for discharge of liability, if the cheque bounces, can attract Section 138 NI Act.
Even if a blank signed cheque is given to secure liability, once the liability is quantified and the cheque is filled up and presented, the drawer cannot avoid liability under Section 138 NI Act.
Sanalkumar v. Rajjevkumar (2004(1) KLT 689)
General Auto Sales v. Vijayalakshmi (2005(1) KLT 478)

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends that the accused allegedly borrowed Rs.1,00,000 and issued Ext. P1; the defence version that he gave a signed blank cheque to Ravindran and that Ravindran, a colleague, misused it, was not properly considered by the trial court. It is urged that the cheque was issued in discharge of a liability and that decisions of the Supreme Court (Sanalkumar v. Rajjevkumar and General Auto Sales v. Vijayalakshmi) establish that a cheque given as security or blank at the time of loan can still be prosecuted under Section 138 NI Act when the amount is later quantified and the cheque is filled and presented. The appellant argues the absence of Ravindran’s examination does not negate PW1’s credibility, and that the surrounding circumstances support the claim of borrowing and non-payment despite due notice Ext. P4.

Contentions of Respondents

The respondents submit that the trial court rightly acquitted the accused, as the prosecution failed to establish that the accused borrowed Rs.1,00,000 and issued Ext. P1, and that the defence version about a blank signed cheque to Ravindran lacks corroboration. They argue that inconsistencies in the cheque’s date and entries, and the lack of independent proof about the source of the funds, undermine PW1’s case. The respondents rely on the trial court’s assessment of evidence and contend that if the case is to be believed, the accused could still be subject to a complaint under Section 138 if the facts are established; however, in the appellate context, the lower court’s conclusions were sound given the evidence.”},

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Sanalkumar v. Rajjevkumar	2004(1) KLT 689	Positive	Cited to support that a cheque given as security or a blank cheque, when later filled, can still attract liability under Section 138 NI Act.
General Auto Sales v. Vijayalakshmi	2005(1) KLT 478	Positive	Cited for the principle that a cheque given to secure liability can be prosecuted under Section 138 NI Act when the liability is proven and the cheque is presented.

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Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.Q.BARKATH ALI TUESDAY, THE 7TH DAY OF FEBRUARY 2012/18TH MAGHA 1933 CRL.A.No. 1900 of 2005 ( ) -------------------------AGAINST THE ORDER/JUDGMENT IN CRLP.584/2005 DATED 04-10-2005 CC.439/2003 of C.J.M.,TRIVANDRUM APPELLANT(S)/COMPLAINANT:: ------------------------- SHAJI K.ISHARA II FLOOR,SSC BUILDING, PAPPANAMCODE P.O., THIRUVANANTHAPURAM. BY ADV. SRI.D.KISHORE RESPONDENT(S)/ACCUSED & STATE:: ------------------------------- 1. B.MADHU PCT 1002, D. COMPNAY, A.R. CAMP THIRUVANANTHAPURAM CITY, VIKAS BHAVAN P.O. THIRUVANANTHAPURAM. 2. STATE OF KERALA REPRESENTED BY ITS PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. R,R1 BY SRI.V.VIJULAL R,R1 BY SRI.R.T.PRADEEP PUBLIC PROSECUTOR SRI.NOUSHAD THOTTATHIL THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 07-02-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **P. Q. BARKATH ALI, J.** **----------------------------------------------Crl.A. No. 1900 of 2005 ------------------------------------------------------Dated this the day of 7[th] February, 2012** ## **JUDGMENT** The appellant is the complainant in C.C.No.439 of 2003 on the file of the Chief Judicial Magistrate, Thiruvananthapuram. He filed a complaint under Section 138 of the Negotiable Instruments Act against the respondent/accused before the learned Magistrate. The learned Magistrate by judgment dated August 3, 2005 dismissed the complaint and acquitted the accused holding that appellant/complainant has failed to prove his case. The complainant has come up in appeal challenging the said judgment of the lower court. 2. The case of the appellant/complainant, as testified by him as PW1 before the trial court and as detailed in the complaint, in brief, is this:- The accused borrowed Rs.1,00,000/- from the complainant and to discharge that liability he issued the cheque Ext.P1 dated October 15, 2003. When the cheque was presented for collection it was returned dishonoured for want of sufficiency of funds in the Crl.A. No. 1900 of 2005 2 account of the accused in the bank and that in spite of notice Ext.P4 dated, November 6, 2003 the accused did not re-pay the amount. Therefore, the complainant filed the complaint before the trial court under section 138 of the Negotiable Instruments Act. 3. On receipt of the complaint, the trial court recorded the sworn statement of the complainant and took cognizance of the offence. The accused on appearance before the trial court, pleaded not guilty to the charge under section 138 of the Negotiable Instruments Act. The complainant was examined as PW1 and Exts.P1 to P6 were marked on his side. When the accused was questioned under section 313 Cr.P.C. by the learned Magistrate, he denied the entire transaction and submitted that he had issued a signed blank cheque to one Ravindran when he borrowed Rs.30,000/from Ravindran and the complainant obtained that cheque from Ravindran and mis-used the same and created Ext.P1. DW1 was examined on his side. 4. The trial court, on an appreciation of evidence, Crl.A. No. 1900 of 2005 3 found that the complainant has failed to show that the accused has borrowed any amount from him and issued the cheque Ext.P1, that the case put forward by the accused that he issued blank signed cheque to one Ravindran, who happened to hand over the same to the complainant appears more probable and found the accused not guilty of the offence punishable under Section 138 of the NI Act and acquitted him. The complainant has now come up in appeal challenging the said judgment of the lower court. 5. Heard the learned counsel for the appellant and the learned counsel for the first respondent. 6. The following points arise for consideration :- - 1) Whether the finding of the lower court that accused is not guilty of the offence punishable under Section 138 of the NI Act and acquitting the accused can be sustained? - 2) What is the offence committed by the accused ? - 3) The event of conviction, what is the proper punishment to be imposed ? 7. The counsel for the appellant argued that Ravindran, was a Head Constable in the police department Crl.A. No. 1900 of 2005 4 employed along with the accused and that the accused has handed over the cheque to him. But he was not examined by the accused to prove his case. He pointed out that no reply was sent by the accused to the notice sent by the complainant and that even if the contention of the accused that blank signed cheque was given to Ravindran, it will attract the penal provision of Section 138 of the NI Act and that therefore, the learned Magistrate is not justified in rejecting his case and acquitting the accused. The learned counsel for the first respondent/accused on the other hand, supported the judgment of the trial court. 8. For the following reasons, I am inclined to hold that the learned Magistrate is not justified in rejecting the evidence of PW1 and dismissing the complaint. The specific case of the accused was that he borrowed Rs.30,000/- from from one Ravindran, who is a colleague of complainant and issued a signed blank cheque to him which was misused by the complainant and created Ext.P1. The said Ravindran was not examined by the accused to prove his case. Crl.A. No. 1900 of 2005 5 Admittedly, accused is a police constable and the said Ravindran is also constable working along with him. If the accused wanted he could have examined the said Ravindran and as a witness proved his case. 9. On the other hand, accused examined DW1, who was allegedly present at the time of the transaction between the accused and Ravindran. He would say that he has put the date in the cheque Ext.P1. But when cross examined he admitted that he has filled up the cheque on the instruction of the accused which falsifies the case of the accused that he has issued a blank signed cheque to the said Ravindran. 10. That apart, even if the version of the accused that he has issued blank signed cheque to Ravindran and he handed over the cheque to the complainant accused is liable to be proceeded under Section 138 of NI Act. It has been held by the Apex Court that in **Sanalkumar v. Rajjevkumar(2004(1) KLT 689)** and in **General Auto Sales v. Vijayalakshmi** , **(2005(1) KLT 478)** the cheque given as a security for the discharge of liability of another, if Crl.A. No. 1900 of 2005 6 bounced, shall be the subject matter of a prosecution under Section 138 of Negotiable Instruments Act. It has been further held therein that even if blank cheque has been given to liability or even as security, when liability is assessed and quantified and the cheque is filled up and presented to bank, person who has drawn the cheque cannot avoid criminal liability arising out of Section 138 of NI Act. In the light of the principles laid down in the above decisions, I am inclined to hold that the lower court not justified in rejecting the evidence of PW1. On the other hand accused has failed to prove his case. Therefore, I accept the evidence of PW1 and hold that the accused has borrowed Rs.1,00,000/- from the complainant and issued a cheque Ext.P1, which when presented for collection was returned dishonoured for want of sufficiency of funds in the account of the accused in the bank and in that in spite of notice Ext.P4 dated, November 6, 2003, he did not repay the amount, which is an offence punishable under Section 138 of the NI Act. The finding of the lower court on this aspect is set aside. Crl.A. No. 1900 of 2005 7 11. The counsel for the first respondent argued that there is some difference in the entry in the date and other entries in the cheque, which is not explained by the complainant and that PW1 has not mentioned the names of the persons from whom he collected the amount which was given to the accused and that therefore, evidence of PW1 has only to be rejected. There is no force in the above contention. Of course, there is some difference in the entry in the date and other entries in the cheque. DW1 has stated that he has put the date in Ext.P1 and he has entered other entries in the cheque on the instruction of the accused. Further PW1 is not bound to disclose the source from whom he obtained the amount which he has advanced to the accused. That apart, merely on the above ground, I am not inclined to reject the evidence of PW1, as I have already found that accused has borrowed Rs.1,00,000/- from the complainant and issued Ext.P1. For all these reasons, I set aside the finding of the lower court that the accused has failed to proved his case and hold that complainant has Crl.A. No. 1900 of 2005 8 proved his case regarding the borrowal of amount and issuance of Ext.P1 cheque and hold that accused has committed the offence punishable under Section 138 of the NI Act and I therefore convict him thereunder. 12. As regards the sentence the accused is a police constable therefore, I feel that a direction to pay compensation of Rs.1,00,000/- with default sentence would meet the ends of justice. In the result, appeal is allowed. The judgment of the lower court acquitting the accused is set aside. He is convicted under Section 138 of the NI Act and is sentenced to pay a compensation of Rs.1,00,000/- to the complainant in default to undergo simple imprisonment for three months. Two months time is granted for payment of compensation. **P. Q. BARKATH ALI, JUDGE.** pm.