Sree Gokulam Chit and Finance Co. (P) Ltd v Vinod Kumar S/o Kunjoyi and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE K.HARIPAL** **FRIDAY, THE 11[TH] DAY OF JUNE 2021 / 21ST JYAISHTA, 1943** **CRL.A NO. 354 OF 2011** **AGAINST THE JUDGMENT IN CC 465/2007 OF JUDICIAL MAGISTRATE OF** **FIRST CLASS ,PERAMBRA, KOZHIKODE** ## **APPELLANT/COMPLAINANT:** **M/S.SREE GOKULAM CHIT AND FINANCE CO.(P)LTD, GOKULAM TOWERS,NO.66, ARCOT ROAD,CHENNAI,** **REPRESENTED BY IT'S LEGAL CLERK,** **MR.SUDHEESH KUMAR P.K. AGED 34 YEARS, S/O P K KRISHNAN** **BY ADV SRI.K.S.BABU** ## **RESPONDENTS/ACCUSED & STATE:** **1 VINOD KUMAR S/O KUNJOYI,** **NADUVATHOTH HOUSE,** **IRINGATH POST,PAYYOLI – 673 523** **2 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR,** **HIGH COURT OF KERALA,** **ERNAKULAM – 682 031** ## **OTHER PRESENT:** **SR.PP- SRI. M.S.BREEZ,** **AMICUS CUEAI - SRI. SREEDEV U.** **THIS CRIMINAL APPEAL HAVING COME UP FOR HEARING ON 08.04.2021, THE COURT ON 11.06.2021, DELIVERED THE FOLLOWING:** Crl.A.No.354 OF 2011 2 ## **JUDGMENT** The appellant is the complainant in C.C.No.465/2007 on the file of the Judicial Magistrate of First Class-I, Perambra. The case was taken on file as a private complaint instituted by the appellant on 13.11.2007, on the basis of a bounced cheque. The allegations in the complaint are that the complainant is a limited company engaged in chit and finance business with its head quarters in Chennai having branches in different parts of the country including in Kozhikkode. It is alleged that the complainant had conducted a registered chit bearing No.J2G-308-6 with a sala of Rs.3,00,000/-, in which the first respondent was a subscriber. He had bid the chitty for Rs.2,25,000/and paid some amount towards repayment. But when he defaulted payment of the amount, the officials of the company contacted him and at that time, the first respondent reached the office of the complainant and issued the cheque bearing No.7230 of Meppayur Co-operative Town Bank for Rs.1,20,250/- on 13.08.2007. The Crl.A.No.354 OF 2011 3 complainant presented the cheque for encashment through Perambra branch of the Federal Bank, but it returned dishonoured on 04.09.2007 due to insufficiency of funds. Thereafter, the complainant issued a lawyer notice on 01.10.2007, which was duly served on the respondent. But the amount was not paid nor any reply was sent and thus cause of action arisen for initiating action under Section 142 of the Negotiable Instruments Act alleging offences under Section 138 of the Negotiable Instruments Act, hereinafter referred to as the Act. 2. Pursuant to the summons, the first respondent entered appearance and contested the allegations through his counsel. When particulars of the offence were read over and explained, he pleaded not guilty. The legal clerk of the complainant was examined as PW1 and Exts.P1 to P8 were marked. After closing the prosecution evidence, when examined under Section 313 of Code of Criminal Procedure, hereinafter referred to as the Cr.P.C., the first respondent denied the allegations including the issuance of the cheque. He had no oral evidence in defence; However, Exts. D1 to D4 were marked. Crl.A.No.354 OF 2011 4 After hearing counsel on both sides, by the impugned judgment dated 29.05.2010, the learned Magistrate found the first respondent not guilty and acquitted him under Section 255(1) Cr.P.C and that finding has been called in question in this appeal preferred under Section 378(4) of the Cr.P.C, after obtaining special leave of this Court. 3. The learned Magistrate entered a finding against the appellant mainly on the premise that the proper ledger account was not produced. The Ext.P8 does not contain the remittances made by the first respondent through Ext.D1 to D3 documents. Even though it was claimed that such remittances are entered in the daily ledger extract, in spite of affording opportunity, such documents were not produced and on that premise, it was found that the appellant failed to prove that so much amounts were due from the first respondent and on that consideration, the complaint was dismissed and the first respondent was acquitted. 4. Even though notice was served on the first respondent, he did not engage a lawyer nor did contest the appeal. Therefore, Adv. Crl.A.No.354 OF 2011 5 Sri.Sreedev U was appointed as Amicus Curiae and the appellant was directed to serve copies of relevant records to the learned Amicus Curiae. 5. I heard learned counsel on both sides. According to the learned counsel for the appellant, it is a chitty transaction, which had started on 04.07.2005 and terminated on 04.02.2007 and the total sala of the chitty was Rs.3,00,000/-. The first respondent had bid the chitty and an amount of Rs.2,25,000/- was paid to him; altogether an amount of Rs.1,89,650/- was collected from him on various instalments; at last an amount of Rs.1,10,350/- was due, this together with the interest is payable by the subscriber. The learned counsel also pointed out that under Section 21(1)(c) of the Chit Funds Act, the foreman of the chitty is entitled to claim interest and other incidental expenses from the subscriber. Regarding the finding of the learned Magistrate that the Ext.P8 does not reflect the total remittances made by the subscriber/ first respondent, the counsel pointed out that in fact in Ext.P8 monthly ledger extract all the remittances are accounted, where as, if the daily ledger extract was Crl.A.No.354 OF 2011 6 produced, the entire remittances would have been shown reckoned date-war. According to him, there is absolutely nothing to suspect the Ext.P8 document. He said that the chitty was bid on the 4[th] and so that the monthly ledger extract was prepared with reference to 4[th] of every month. That means all the remittances made after the 4[th] till the next succeeding 4[th] alone will be reflected in the Ext.P8; according to him, amounts remitted through Ext.D1 to D3 are entered in the Ext.P8. To buttress his position, the learned counsel filed Crl.M.A.No.484/2013 and produced daily ledger statement and said that the Ext.D1 to D3 remittances can be seen therein. The Ext.P8 and this Annexure-I produced along with the Crl.M.A do tally and therefore, according to the learned counsel, Annexure-I document would support the case of the prosecution. Regarding the admissibility of this statement, the learned counsel relied on the decision reported in **Ashok Tshering Bhutia v. State Of Sikkim** **[2011 (4) SCC 402].** According to him, under Section 391 of the Cr.P.C, there is absolutely nothing wrong in the appellate court taking additional evidence. Therefore, the learned counsel prayed for Crl.A.No.354 OF 2011 7 admitting the daily ledger statement and prayed for allowing the appeal. 6. On the other hand, the learned Amicus Curiae defended the judgment of the learned Magistrate. Referring to paragraph 8 of the judgment, he said that relevant documents were not produced by the appellant/complainant and thus he was inviting the defeat. Referring to the decision reported in **Susamma Raju v K.M.Wilson and another [2018 (1)KHC 846]** , he said that when a prosecution regarding the bouncing of cheque in a commercial transaction is alleged, it is necessary that all the account books are produced in support of the claim. In the absence of such a document, there is absolutely nothing to interfere with the judgment under attack, says the counsel. 7. I have gone through the entire materials leading to the impugned judgment. As noticed earlier, the very case of the complainant/appellant is that, it is a company registered under the Companies Act dealing in finance and chit matters; it had run a registered chitty as foreman; the first respondent was one of the Crl.A.No.354 OF 2011 8 subscribers and he had bid the chitty for Rs.2,25,000/- for a chitty having sala of Rs.3,00,000/- and the subject cheque, Ext.P2 was issued when he had defaulted subscriptions. According to the counsel, at that time a sum of Rs.1,10,028/- was due and this together with interest of Rs.9900/-, the amount due was Rs.1,20,928/-. For which the Ext.P2 cheque for Rs.1,20,250 was issued, which was dishonoured due to insufficiency of funds and that was how the complaint was laid. Even though the first respondent/accused maintained that he had not issued the cheque, but he did not deny the fact that he was the subscriber of the chitty and Exts.D1 to D3 were projected to say that the Ext.P8 ledger account was incorrect. After going through the records, I also feel that, at the first blust, the Ext.P8 does not reflect the actual remittances made by the subscriber. At the same time, the Annexure-I document produced by the learned counsel for the appellant, _prima facie_ would throw better light on this aspect and no doubt that if such a document was produced before the trial court at the time of the trial, the fate of the case would have been different. Crl.A.No.354 OF 2011 9 The decision in **Susamma Raju** has no application since, it has come out that the appellant had produced the ledger extract of the chitty transaction, in which the first respondent was a subscriber. But it happened to be the monthly ledger statement which had reckoned only statements as on 4[th] of every month. In other words, daily remittances cannot be disearned from this document. The additional document was produced for the purpose of clarifying and giving more light on Ext.P8 document. The question is whether the appeal can be disposed of in favour of the appellant basing on the additional document produced. But after considering rival contentions and the materials, I am not inclined to take a decision at this stage by this Court. Admittedly, the additional document produced cannot be taken on its face value unless proved through competent witness or without subjecting the witness to cross examination. At this stage, this Court is not inclined to invoke Section 391 of Cr.P.C for this purpose. No exceptional circumstances are made out to take such an extreme step by the High Court. Secondly, as noticed earlier, even though the notice in Crl.A.No.354 OF 2011 10 the appeal was served on the first respondent, he has chosen not to contest and an Amicus Curiae was appointed to consider the correctness of the finding of the learned Magistrate. Therefore, in the absence of the first respondent before this Court, it would not be in the interest of justice to consider the Annexure-I document and to take a final decision, for which, I feel that the case should go back to the trial court and the parties should be afforded another opportunity to contest the matter. 8. Even though the first respondent had taken an evasive stand with regard to the execution of Ext.P2 cheque from the overall stand taken by him, it seems that he has not totally denied the execution of the same. What ever it may be, he has raised a plea of total discharge. When such a plea is taken, it is for him to adduce evidence regarding the discharge. I feel that the Annexure-I document produced along with the appeal cannot be ignored. I have considered this document along with Ext.P8 and D1 to D3 documents. Exts.D1 to D3 show that amounts of Rs.12,000/-, 4,000/-, and 5,000/- respectively were remitted by the first Crl.A.No.354 OF 2011 11 respondent on 01.10.2005, 17.10.2005 and 08.06.2007. There is a factual mistake in the judgment of the learned Magistrate, where it is stated that Ext.D3 cannot be disearned from Ext.P8. But it is incorrect. The learned Magistrate has taken the date of Ext.D3 as 08.06.2009, which is incorrect. The actual date is 08.06.2007 and that payment of Rs.5000/- can be seen from Ext.P8 itself. Similarly, there is substance in the contention of the learned counsel for the appellant that, if daily remittances are reckoned, it is available in the additional document produced before this Court. It can be seen that Exts.D1 and D2 remittances also can be seen . Any how it has to be considered along with Ext.P8. 9. Having regard to the circumstances and the stake involved, I think it is only expedient to remand the case to the trial court for taking stock of matters afresh, after giving opportunity to both sides to adduce additional evidence, if any. 10. In view of the above, the finding of the learned Magistrate is hereby set aside. The case will be sent back to the trial court for fresh disposal. The learned Magistrate will afford opportunity to Crl.A.No.354 OF 2011 12 both sides to adduce their respective evidence and after hearing both sides, the case will be disposed of. The parties will appear before the trial court on 30.06.2021. The trial court shall issue fresh summons to the accused/first respondent and will be posted the case after 15 days thereafter. Considering the fact that it is in respect of a transaction of 2015, the case shall be disposed of within a period of three months thereafter. The appeal allowed as above. **Sd/K. HARIPAL JUDGE** Jms/12.04 //True Copy// P.A to Judge