Sree Gokulam Chit & Finance Co. (P) Ltd. v. P.V. Valsala Devi and State

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 17TH AUGUST 2011 / 26TH SRAVANA 1933 Crl.L.P..No. 691 of 2011 ------------------------------(AGAINST JUDGMENT IN CC.1442/2006 of ADDL.C.J.M.(E&O),ERNAKULAM) .................... PETITIONER/COMPLAINANT.: ------------------------------------------ M/S. SREE GOKULAM CHIT & FINANCE CO.(P) LTD., NO.66 (OLD NO.356), ARCOT ROAD, KODAMBAKKAM, CHENNAI, REP. BY IT'S POWER OF ATTORNEY HOLDER T.K.BHARATHAN, AGED 45 YEARS, ASST.BUSINESS MANAGER, SREE GOKULAM CHIT & FINANCE CO.(P) LTD., SHERINE BUILDING,JOS JUNCTION,M.G.ROAD,KOCHI 16. BY ADV. SRI.K.S.BABU SMT.N.SUDHA RESPONDENTS(S): RESPONDENTS/ACCUSED & STATE. -------------------------- 1. P.V.VALSALA DEVI, W/O. NANDAKUMAR, PADINJATTIYEDATH HOUSE, VENNALA P.O., KOCHI - 28. 2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, KOCHI - 31. BY ADV. SRI.R.SUDHISH FOR R1 SRI.SUSHANTH.J. FOR R1 R2 BY PUBLIC PROSECUTOR SRI.K.S.SIVAKUMAR. THIS CRIMINAL LEAVE PETITION HAVING COME UP FOR ADMISSION ON 17/08/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ## **V.K.MOHANAN, J.** ## **---------------------------------------Crl.L.P.No. 691 of 2011** ## **---------------------------------------Dated this the 17[th] day of August, 2011** ## **O R D E R** The complainant in a prosecution for the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the N.I.Act') is the petitioner herein, who seeks special leave under Section 378(4) of the Criminal Procedure Code (for short 'the Cr.P.C.) to file an appeal against the order of the trial court by which the learned Magistrate in his complaint, acquitted the accused under Section 255(1) of the Cr.P.C. 2. The case of the complainant is that the complainant is a company involved in chitty business and the accused herein was the guarantor of one of the subscribers of a chit, run by the complainant. The subscriber is the husband of the accused. According to the complainant, being the guarantor, the accused issued Ext.P5 cheque dated 8.8.2005 for Rs.54,319/-, which amount, according to the complainant, was due to the complainant from the subscriber as on CRL.L.P.NO. 691 of 2011 :-2-: 8.8.2005. It is the further case of the complainant that when the above cheque presented for encashment, the same was dishonoured as there was no sufficient fund in the account maintained by the accused and the accused has not repaid the amount covered by the dishonoured cheque in spite of the statutory notice served on her. Thus, according to the complainant, the accused has committed the offence punishable under Section 138 of the N.I.Act. With the above allegation, by filing a complaint, the complainant approached the court of Additional Chief Judicial Magistrate (EO), Ernakulam based upon which the court, after taking cognizance of the said offence, instituted C.C.No.1442 of 2006. During the trial, one Bharathan, S/o. Raman was examined as PW1 for and on behalf of the complainant/company. Besides the above oral evidence, Exts.P1 to P11 documents were also produced. From the side of the defence, DWs.1 and 2 were examined and Exts.D1 and D2 documents were also produced. The trial court, after considering the entire evidence and materials, held that taking into account of the backdrop of the failure of the complainant to establish ## CRL.L.P.NO. 691 of 2011 :-3-: the execution of Ext.P5 cheque, it is not possible to come to a finding that the accused had executed and issued Ext.P5 cheque towards discharging the liability of Rs.54,319/- as alleged in the complaint. It is the above sentence and order of acquittal under Section 255(1) of the Cr.P.C. sought to be challenged by filing an appeal for which leave of this Court is sought under Section 378(4) of Cr.P.C. 3. Heard Sri.K.S.Babu, learned counsel appearing for the petitioner. I have also perused the judgment of the trial court. 4. The trial court after considering the evidence and materials held as follows:- “....... _On the other hand there is only a bald statement in paragraph 5 of the proof affidavit that to discharge the liability due to the complainant, the accused issued cheque bearing N.000859 dated 8.8.2005 drawn on the Jammu and Kashmir Bank Limited, M.G.Road, Kochi682035 for Rs.54,319/- to the complainant and the accused instructed the complainant to encash the same. A mere statement in the above regard is not sufficient to establish the execution of Ext.P5 cheque by the accused. No credence could be given to such vague and superficial_ CRL.L.P.NO. 691 of 2011 :-4-: _statements which do not reveal as to how the deponent came to know about the facts stated therein. Therefore, it has to be stated that proof affidavit of PW1 hopelessly lacks the material particulars to establish the execution of Ext.P5 cheque by the accused towards discharging the liability of Rs.54,319/-.”_ It is on the basis of the above observation and appreciation of evidence the trial court has found that the complainant has not succeeded in proving the offence against the accused under Section 138 of the N.I.Act 5. Learned counsel for the petitioner vehemently submitted that the signature that contained in Ext.P5 cheque is admitted by the accused and therefore, the execution is also admitted by the accused and hence the finding of the trial court is against the evidence and materials on record. It is also pointed out by the learned counsel that though a statutory notice was sent at the instance of the complainant and in spite of the receipt of the same, the accused has not served any reply and therefore, the above conduct of the accused itself is sufficient to hold that the liability claimed by the complainant is CRL.L.P.NO. 691 of 2011 :-5-: correct. In support of the above contention, the learned counsel **Bindu** v. placed reliance upon the decision of this Court reported in **Sreekantan Nair** [2007(1) KLT 525]. 6. In the light of the claim of the complainant and the defence and the materials and evidence on record and particularly the findings of the court below, the question to be considered is whether the petitioner has made out a case to grant special leave to file an appeal against the judgment of the trial court, acquitting the accused under Section 255(1) of Cr.P.C. 7. The specific case of the complainant is that the accused, being the guarantor of the chitty transaction of her husband with the complainant and towards the discharge of the liability that arises out of such transaction, issued the cheque in question. On the other hand, the specific contention taken by the defence is to the effect that the complainant obtained a signed blank cheque and promissory note from the accused at the time when the complainant disbursed the chitty amount to the subscriber, who is the husband of the accused. Thus, CRL.L.P.NO. 691 of 2011 :-6-: according to the accused, the present prosecution is launched by the complainant by filling up the above signed blank cheque so obtained from her long before the date mentioned in Ext.P5 cheque. Considering the rival contention, the court below framed two points for its consideration among which the first point is “ _whether the accused has executed and issued Ext.P5 cheque in discharge of a legally enforceable debt of Rs.54,319/- which he owed the complainant_ ”. While considering the above issue, the trial court has found that PW1 is the Power of Attorney Holder of the complainant, who had been substituted on 4.10.2010 in the place of the earlier representative of the complainant who has filed the complaint. The trial court also found that in the proof affidavit filed by PW1, nothing is mentioned as to whether he was having any direct knowledge regarding the execution of Ext.P5 cheque or the circumstances which led to the execution of that cheque. The trial court has further found in paragraph 5 of the proof affidavit that there is only a bald statement to the effect that to discharge the liability due to the complainant, the CRL.L.P.NO. 691 of 2011 :-7-: accused issued Ext.P5 cheque. So, on the basis of the above evidence, the trial court has further found that the proof affidavit of PW1 as well as the materials are insufficient to establish the execution of Ext.P5 cheque by the accused and issued the same towards the discharge of liability of Rs.54,319/-. According to me, in the light of the specific contentions raised by the defence, the prosecution has got a duty to prove with sufficient evidence that the accused has executed and issued the cheque towards the discharge of the liability of Rs.54,319/-. Mrs.N.Sudha, learned counsel for the petitioner strenuously submitted that as the accused had admitted her signature in Ext.P5 cheque, the court ought to have, by invoking Section 114 of the Evidence Act, presumed that Ext.P5 cheque was executed and issued by the accused. In support of the above submission, as I pointed out earlier, the counsel invited my attention to the decision of this Court reported in **Bindu** v. **Sreekantan Nair** (2007(1) KLT 525). In the said decision, this Court has held as follows:- CRL.L.P.NO. 691 of 2011 :-8-: “.................. _But that observation cannot be understood to mean that admission of signature is equivalent or synonymous with admission of execution. Admission of signature does go a long way in the attempt to prove execution of a document. But the nice legal distinction between admission of signature and admission of execution must always be borne in mind. Admission of signature may in an appropriate case persuade the Court to draw permissive presumptions of fact under S.114 of the Evidence Act. But certainly the right of the accused to contend that a blank signed cheque was mis-utilised by the payee cannot be taken away by such mere admission of signature. Ultimately when the evidence is appreciated the Court shall have to consider whether Admission of signature coupled with the other circumstances is sufficient to prove execution. But the right of the accused is to show that only the signature is his/hers and the other entires are made unauthorisedly by th complainant cannot be taken away_ .....” Thus, on examination of the facts and circumstances involved in the case and in the light of the above decision of this Court, I am of the view that the learned Magistrate is fully justified in his finding. As rightly observed by the learned Magistrate, no credence can be given to such vague and superficial statements which contained in the deposition of PW1, especially when those statements do not reveal as to how the deponent came to know about the facts stated in the proof affidavit. There is no positive evidence from the part of PW1, either in the proof affidavit or during the cross examination that he had witnessed the execution of Ext.P5 cheque. In the present case, the accused, by giving a convincing explanation, established as to how CRL.L.P.NO. 691 of 2011 :-9-: Ext.P5 cheque reached in the possession of the complainant. According to her, when the amount was released connected with the chitty transaction between the husband of the accused and the complainant, the complainant obtained blank cheque leaves and also promissory note from her. In the light of the above defence of the accused, it is incumbent upon the complainant to establish by adducing cogent evidence that the accused, after having understood the liability connected with the guarantorship of the accused, has executed and issued the cheque. But, in the present case, there is no such evidence. As rightly observed by the learned Magistrate, there is only a bald statement in the proof affidavit that to discharge the liability due to the complainant, the accused issued Ext.P5 cheque. The above version or statement, according to me, is not sufficient to hold that Ext.P5 cheque was executed and issued by the accused as claimed by the complainant, especially when such a statement can be made by any person. In the absence of any positive evidence regarding the execution of cheque and issuance of the same and in the CRL.L.P.NO. 691 of 2011 :-10-: light of the explanation offered by the accused, I am of the view that the accused has discharged her burden in rebutting the presumption which is otherwise available in favour of the complainant under Section 139 of the N.I.Act. Having regard to the above facts and circumstances and in the light of the above discussion, I am of the view that even if an appeal is entertained, there is no scope for any interference with the findings of the learned Magistrate. In the light of the above discussion and materials referred to above, according to me, there is no compelling or substantial reason so as to interfere with the order of acquittal recorded by the trial court. Therefore, the petitioner has miserably failed to make out a case to grant special leave under Section 378(4) of Cr.P.C. Thus, there is no merit in the above Crl.L.P. and accordingly, the same is dismissed. MBS/ ( **V.K.MOHANAN) Judge.** CRL.L.P.NO. 691 of 2011 :-11-: Thus, according to me, the said conclusion and findings are fully justified and no interference is warranted, even in case an appeal is entertained against the above finding and the order of acquittal and there is no substantial ground to reverse the order of acquittal. There is no compelling or substantial reason to interfere with the order of acquittal recorded by the learned Magistrate. Therefore, the petitioner has miserably failed to make out a case to grant special leave under Section 378(4) of Cr.P.C. V.K.MOHANAN, Judge MBS/ CRL.L.P.NO. 691 of 2011 :-12-: V.K.MOHANAN, J. CRL.L.P.No. OF 20 CRL.L.P.NO. 691 of 2011 :-13-: O R D E R Dated:2. ..2011