Sree Gokulam Chit and Finance Co. (P) Ltd. v. State of Kerala and Sreekumaran

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **MONDAY, THE 31ST DAY OF JULY 2017/9TH SRAVANA, 1939** **Crl.L.P..No. 280 of 2017 ()** **---------------------------ST.788/2015 of CHIEF JUDICIAL MAGISTRATE COURT, PALAKKAD** ## **PETITIONER(S)/COMPLAINANT.: --------------------------** **SREE GOKULAM CHIT AND FINANCE CO.(P) LTD. SANJOS TOWER, OPPOSITE KSRTC BUS STAND, SHORNUR ROAD, PALAKKAD. REPRESENTED BY ITS LEGAL K.K SUBASHKUMAR, S/O KRISHNAN, AGED 33 YEARS, RESIDING AT PULINELLI, KOTTAYI, PALAKKAD.** **BY ADV. SRI.K.SIVAKUMAR** ## **RESPONDENT(S)/STATE & ACCUSED.:** **-------------------------------** **1. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.682031.** ## **2. SREEKUMARAN,** **AGED 32 YEARS, S/O APPUKUTTAN K., KALAKKAD HOUSE, THANEERPANTHAL, KINASSERRY, PALAKKAD.678701.** **R1 BY PUBLIC PROSECUTOR SRI.SAIGI JACOB PALETTY** **THIS CRIMINAL LEAVE PETITION HAVING COME UP FOR ADMISSION ON 31-07-2017, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **EL** ## ALEXANDER THOMAS, J. ----------------------------Crl.L.P.No.280 Of 2017 --------------------------------- Dated this the 31st day of July, 2017. ## O R D E R The petitioner seeks leave of this Court under Sec.378(4) of the Cr.P.C for filing Criminal Appeal to impugn the judgment dated 26.4.2017 rendered by the trial court concerned (Chief Judicial Magistrate Court, Palakkad), whereby the accused in S.T.C.No.788/2015, has been acquitted of the offence punishable under Sec.138 of the Negotiable Instruments Act. The petitioner herein is the complainant in the Summary Trial Case and the 2nd respondent herein is the accused therein. 2. Heard Sri.K.Sivakumar, learned counsel appearing for the petitioner-complainant and Sri.Saigi Jacob Palatty, learned Prosecutor appearing for R-1 State. In the nature of the order proposed to be passed in this petition, notice to R-2 stands dispensed with. 3. The gist of the allegations in the complaint is that the complainant is a chit company which had chit transactions with the accused and that for discharging the liability of Rs.2,27,325/-, he had issued the instant Ext.P-1 cheque dated 3.9.2012 for the above said ::2:: Crl.L.P.No.280 Of 2017 amount drawn from his account and payable in favour of the complainant and the cheque when presented resulted in dishonour as per Exts.P-2 & P-3 dishonour memos. After complying with requisite statutory formalities in that regard, including issuance of statutory demand notice, the instant complaint has been filed before the jurisdictional Magistrate concerned. During trial, the power of attorney holder of the complainant company, who is the legal clerk of the complainant company, has given evidence as PW-1. Through PW-1, Exts.P-1 to P-8 documents have been marked. Defence has not adduced any oral or documentary evidence. The case of the defence is that the accused was constrained to give a blank signed cheque as security at the time of commencement of the kuri transaction and that he has never voluntarily issued Ext.P-1 cheque as alleged in the complaint and the said cheque has been misused by presenting the same for falsely instituting the present complaint, etc. Therefore, in view of the stand taken by the accused, it can be seen that he has no serious disputes with the signature in the said cheque belongs to him and hence going by the legal principles laid down in various rulings of the Apex Court as in Rangappa v. Sri Mohan, reported in (2010) 11 SCC 441 and T.Vasanthakumar v. Vijayakumari , reported in (2015) 8 SCC 378, the ::3:: Crl.L.P.No.280 Of 2017 benefit of statutory presumption as envisaged in Sec.139 of the N.I. Act could be claimed by the complainant in the facts and circumstances of this case. However, on a meticulous consideration of the facts and circumstances, the trial court after taking into consideration the crucial and relevant evidentiary materials on record, has held that statutory presumption stands effectively and strongly rebutted by the accused, on the basis of preponderance of probabilities in this case due to the following aspects mentioned herein below. (A) The statutory demand notice, the complaint and the proof affidavit are conspicuously silent about the details as to when the kuri transaction commenced as to how many instalments were paid by the accused, date of auction of the kuri, auction amount, contractual interest rate, and as to whether the balance due amount has been properly and correctly quantified, etc. The trial court held that omission to state such crucial and relevant material particulars would amount to suppression of vital aspects relating to the transaction and this could have been purposely done in order to develop a story at the time of trial to suit the convenience of the complainant after knowing the defendant's stand taken, etc. This Court has held in the decision in K.K.Divakaran v. State ::4:: Crl.L.P.No.280 Of 2017 of Kerala reported in 2016 (4) KLT 233, that in a criminal case the accused should be informed before the trial not only of the nature of the offence but also the particulars of the transaction which are necessary for him to effectively meet the case against him. But unscrupulous complainants refuse to do so with the object of denying the accused a fair trial, which is a right guaranteed under Article 21 of the Constitution. An accused in a complaint filed under Sec.142 of the Act also is entitled to know before the trial, the particulars of the accusation against him. Suppression of these particulars in the complaint alone is sufficient to order his acquittal. It will be profitable to refer to paras 18 & 20 of the K.K.Divakaran 's case (supra) which read as follows: "18. Before she filed the complaint the second respondent sent Ext.P4 statutory notice to the revision petitioner informing him about the dishonour of the cheque and demanding payment of the amount covered by it. Neither the nature, nor the date of the transaction between the parties nor the date of issuance of the cheque was disclosed in it. There was only a bald statement that the revision petitioner issued a cheque bearing the date 11.1.1999 for Rs.2,55,000/- in discharge of a debt. There is no explanation why these material facts were not disclosed in the statutory notice. Suppression of material facts relating to the alleged transaction in the notice issued before filing the suit or the complaint is an artifice used by certain litigants, the intention of which is very clear. They want to develop a story after knowing the defence that may be set up by the opposite party. The doors of the court should be closed to such fortune seekers. ## xxx xxx xxx 20. In a criminal case the accused should be informed before the trial not only of the nature of the offence but also the particulars of the transaction which are necessary for him to effectively meet the case against him. But unscrupulous complainants refuse to do so with the object of denying the accused a fair trial, which ::5:: Crl.L.P.No.280 Of 2017 is a right guaranteed under Article 21 of the Constitution. An accused in a complaint case filed under Section 142 of the Act also is entitled to know before the trial the particulars of the accusation against him. Suppression of these particulars in the complaint alone is sufficient to order his acquittal.” Therefore, the above said stand taken by the trial court that suppression of material facts could be fatal to the case of the complainant, cannot be found fault with in the light of the above said legal principles laid down by this Court. (B) The basic case set up by the complainant is that the liability arose out of the which transaction between the complainant chit company and the accused. However, the trial court noted that the terms and conditions of the chit are incorporated in the kuri security agreement. But, that vital document has not been produced and the non-production is fatal to the case of the prosecution. (C) PW-1 would depose that the liability amount under Ext.P-1 dishonoured cheque arose out of a contractual obligation by the accused in favour of the complainant. The interest charged was @ 18% p.a. as per the terms and conditions and that the complainant company, for the reasons best known to them, has not chosen to produce the promissory note at any point of time. The trial court therefore held that non-production of the basic documents would be fatal to the case of the prosecution. Since the said promissory note, which would show the ::6:: Crl.L.P.No.280 Of 2017 nature of the transaction and the agreed rate of interest and since the said promissory note claimed to be in the possession of the complainant, that amounts to the best evidence and therefore its non-production would amount to withholding of the best evidence in the possession of the complainant and such withholding of best evidence held to be fatal to the very case set up by the prosecution. The trial court has also noted that the according to the case of the complainant, the accused has subscribed a chit having altogether 20 instalments and having monthly subscription of Rs.15,000/- thus totalling to Rs.3,00,000/- (Rs.15,000 x 20 = Rs.3,00,000/-) and that subsequently the accused auctioned and received the auction amount, etc. The trial court has found that this admission by itself is not sufficient to prove the existence of a legally enforceable debt and issuance of cheque to discharge the liability as the accused never admitted the liability as shown in Ext.P-1 cheque. The burden was upon the company to prove the said liability. The only document produced to prove the existence of the liability was Ext.P-8 ledger extract. The said document was not produced along with the complaint, though it is stated to be in the possession of the complainant company and it is only produced at a belated stage and got marked by recalling PW-1. Non-production of Ext.P-8, which was alleged to be in ::7:: Crl.L.P.No.280 Of 2017 the custody of the complainant company at the time of filing of the complaint and its belated production was held to be a serious aspect which would affect the very credibility and believability of the case set up by the complainant. Further that Ext.P-8 is defective on many aspects. It was not found that accounts are regularly kept and maintained in the regular course of business. Ext.P-8 only contained the details of monthly payment whereas PW-1 admitted in box that payments were collected by the collection agents both on daily and monthly basis and as far as the accused is concerned there were daily collections and the details of the daily collections are not seen in Ext.P-8. Therefore, the trial court held that Ext.P-8 is the one prepared not with reference to the actual transaction. The said statement of accounts does not contain entries with regard to the date of auction, how much amount was released, what was the foreman commission and the cheque number by which it was disbursed, etc. That if Ext.P-8 was regularly kept in the regular course of the business of the company, all those details would have been reflected in that document. Further that, Ext.P-8 does not contain details of the interest accumulated. All these infirmities led the trial court to hold that Ext.P-8 is not a reliable piece of evidence for safely convicting the accused. None of the ::8:: Crl.L.P.No.280 Of 2017 supporting documents to prove the entries in Ext.P-8 ledger account, including the daily account register were produced. The only person, who was examined in this case is PW-1, who is the legal clerk of the company. Admittedly, he is not the person who had given Sec.65B certification of the Indian Evidence Act, produced along with Ext.P-8 account statement. The trial court held that evidence of PW-1 cannot be as corroborative evidence to strengthen Ext.P-8. Further Sec.65B mandates that requisite certification to be accompanies with a electronic document must be one signed by a person occupying a responsible official position to the operation of the relevant device deviate or the management of the activities. Here, certification is seen signed by the Manager and his name is not mentioned and it is also not mentioned whether he is occupying a responsible official position in relation to the operation of the relevant device or the management or relevant activities. Therefore, this also constrained the trial court to take the view that Ext.P-8 is a inherently feeble piece of material. 4. Further it was found that even if Ext.P-8 is relied upon, it will only prove that the principal amount is Rs.1,32,260/- and the amount shown in Ext.P-1 cheque is Rs.2,27,325/- and there is a difference of Rs.95,065/-. PW-1 submitted that the difference amount ::9:: Crl.L.P.No.280 Of 2017 of Rs.95,065/- is the interest accrued after the termination of the kuri till the date of issuance of the cheque. However, the said fact was not pleaded in the complaint. Nowhere it is stated that the interest was calculated from the date of termination of the kuri and further that nowhere it was disclosed as to the rate of interest. In evidence PW-1 deposed that on receiving the auction amount, the accused had executed a promissory note agreeing to pay interest @ 18% p.a. It is only at a belated stage, the complainant produced a calculation statement disclosing for the first time that interest is calculated at the rate of 18%. As noted hereinabove, the said document, viz., promissory note, has never been produced before the court. All these aspects led the trial court to take the view that withholding of the said evidence would be fatal to the basic case set up by the prosecution. Further the trial court has also found that the hand written entries in the cheque and signatures are seen entered in two different inks. PW-1 has even conceded that cheque was filled up by another person and the accused only signed the cheque. These aspects are also led the court to doubt about the veracity and credibility of the very case set up by the complainant and that these aspects would also strongly probabilise the defence case. 5. It is on the basis of such various considered findings of facts that the trial court has come to the conclusion that the accused entitled to ::10:: Crl.L.P.No.280 Of 2017 get the benefit of acquittal. In the case State of Rajasthan v. Darshan Singh @ Darshan Lal reported in (2012) 5 SCC 789 = 2012(4) Supreme 72, the Apex Court has held as follows:- “In exceptional cases where there are compelling circumstances and the judgment under appeal is found to be perverse, the appellate court can interfere with the order of acquittal. The appellate court should bear in mind the presumption of innocence of the accused and further that the trial court's acquittal bolsters the presumption of his innocence.” Further, in the case Pudhu Raja and another Vs. State reported in (2012) 11 SCC 196 = (2013) 1 SCC (Cri) 430, the Apex Court has held that, “The Appellate court can interfere only in exceptional cases where there are compelling circumstances and the judgment in appeal is found to be perverse. The Appellate court should bear in mind the presumption of innocence of the accused and further that the trial court's order of acquittal bolsters the presumption of innocence”. In the light of the legal principles laid down by the Apex Court, this Court is of the view that even if the the appeal is entertained there is not much scope to overturn the judgment of acquittal rendered by the trial court. Accordingly, this Court is of the considered view that the petition seeking leave is bereft of any merit and the same is dismissed. ALEXANDER THOMAS, Judge. bkn/-