Sugunan v. Thulaseedharan and The State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN** **MONDAY, THE 10TH DAY OF NOVEMBER 2014/19TH KARTHIKA, 1936** **Crl.Rev.Pet.No. 1033 of 2014 ()** **--------------------------------------** **AGAINST THE JUDGMENT IN CC 572/2007 of J.M.F.C., PARAVOOR , DATED 25-06-2012 & AGAINST THE JUDGMENT IN Crl.APPEAL NO. 179/2012 of ADDL. SESSIONS COURT - VI, KOLLAM, DATED 30-04-2014** ## **REVISION PETITIONER(S)/APPELLANT/ACCUSED:** **----------------------------------------------------------------------** **SUGUNAN, AGED 60 YEARS, S/O.SANKU, VIJAYA NIVAS, KURUMANDAL B WARD, PARAVUR, PIN: 691 301.** **BY ADVS.SRI.C.R.VIJAYAKUMARAN PILLAI SRI.R.SANTHOSH (VARKALA) SMT.S.V.HARITHA** ## **RESPONDENT(S)/COMPLAINANT:** **----------------------------------------------** ## **1. THULASEEDHARAN,** **S/O.PADMANABHAN, T.S.BHAVAN, KURUMANDAL, PARAVUR.** ## **2. THE STATE OF KERALA,** **REPRESENTED BY THE PUBLIC PROSECUTOR, ERNAKULAM.** **R1 BY ADV. SRI.HARISH GOPINATH R2 BY PUBLIC PROSECUTOR SMT. SEENA RAMAKRISHNAN** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 1011-2014, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ss **[C.R.]** ## **K. RAMAKRISHNAN, J.** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Crl. R. P. No.1033 of 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dated this the 10[th] day of November, 2014 ## **O R D E R** Accused in C.C.No.572/2007 on the file of the Judicial First Class Magistrate Court, Paravoor, is the revision petitioner herein. The case was taken on file on the basis of a private complaint filed by the first respondent against the revision petitioner, alleging commission of the offence under Section 138 of the Negotiable Instruments Act (hereinafter called ‘the Act’). 2. The case of the complainant in the complaint was that, revision petitioner borrowed a sum of 3,00,000/-₹ on 10.05.2007 and in discharge of that liability, he had issued Ext.P1 cheque. The cheque when presented was dishonoured for the reason ‘funds insufficient’ vide Ext.P2 dishonour memo and the same was intimated to the complainant by his banker vide Ext.P3 intimation letter. 2 Crl. R. P. No.1033 of 2014 The complainant issued Ext.P4 notice vide Ext.P5 postal receipt and the same was received by the revision petitioner evidenced by Ext.P6 postal acknowledgment. The revision petitioner had not paid the amount and he had committed the offence punishable under Section 138 of the Negotiable Instruments Act and hence the complaint. 3. When the revision petitioner appeared before the court below, the particulars of offence were read over and explained to him and he pleaded not guilty. In order to prove the case of the complainant, the complainant himself was examined as PW1 and Exts.P1 to P6 were marked on his side. After closure of the complainant's evidence, the revision petitioner was questioned under Section 313 of the Code and he denied all the incriminating circumstances brought against him in the complainant's evidence. He had further stated that, he had no such transaction with the complainant as claimed by the complainant and he had not issued any cheque as claimed by the complainant. Further, 3 Crl. R. P. No.1033 of 2014 he had filed a detailed statement under Section 313(5) of the Code, in which he had raised the contentions that, during the year 1991, when he went abroad, he had entrusted two blank signed cheques to the complainant, who is none other than his brother-in-law, in order to enable him to get amount sent by him and pay the same to his wife as, she was not well versed in banking transaction. Thereafter, he came back in 2005 and settled all his dues with the complainant, but the cheques were not returned and mis-using one of the cheques so given, he had filed the present complaint. In order to prove his case, the revision petitioner himself was examined as DW1 and Exts.D1 to D5 were marked on his side. After considering the evidence on record, the trial court discarded the evidence of the revision petitioner stating that, it is not believable and believing the evidence of PW1 found the revision petitioner guilty under Section 138 of the Act and convicted him thereunder and sentenced him to undergo imprisonment, till rising of the Crl. R. P. No.1033 of 2014 4 court and also to pay a fine of 3,20,000/-, in default to₹ undergo simple imprisonment for five months. It is further ordered that, if the fine amount is realised, the same be paid to the complainant, as compensation under Section 357(1)(b) of the Code of Criminal Procedure. Aggrieved by the same, the revision petitioner filed Crl. Appeal No.179/2012 before the Sessions Court, Kollam, which was made over to 6[th] Additional Sessions Court, Kollam, for disposal. The learned Additional Sessions Judge by the impugned order dismissed the appeal, confirming the order of conviction and sentence passed by the court below. Dissatisfied with the same, the present revision has been filed by the revision petitioner before this court. 4. This court has ordered notice before admission and without admitting the revision, the execution of sentence was suspended. Since first respondent had appeared through counsel, this court felt that, the revision can be admitted, heard and disposed of today itself. So the Crl. R. P. No.1033 of 2014 5 revision is admitted, heard and disposed of today after hearing both sides. 5. The counsel for the revision petitioner vehmentally argued that, under the Income Tax Act, any amount more than 20,000/- has to be paid only by way of₹ cheque and not by cash and infraction of that provision will make the transaction an illegal one and thereby, it cannot be treated as a legally enforcible debt. He had also argued that, the execution of cheque has been denied and the complainant had no consistent case regarding the execution of the cheque. In the chief affidavit and also in the complaint, he had stated that, the cheque was executed in his presence and the entire writings were written by the revision petitioner in his handwriting, but in the cross examination, he had stated that, the cheque was brought by the revision petitioner filled and signed in his presence. So he had not proved the execution. Once the execution is not proved, no offence under Section 138 is attracted. Further Crl. R. P. No.1033 of 2014 6 in this case, revision petitioner had gone to the witness box and produced documents to prove all his transactions with the complainant and that was not properly appreciated by the courts below. So he had rebutted the presumptions and after his evidence, no further evidence was adduced on the side of the complainant to prove his case further beyond reasonable doubt, so as to attract the offence under Section 138 of the Act. He had relied on the decisions reported in **(2009(2) KLT 897) Bhaskaran Nair v. Mohanan** and **Mahesh Kumar v. Taxi Drivers Co-operative Society Ltd., (2010(4) KLT 544)** and **Gopan v. Tonny Varghese (2008(1) KLT 257)** in support of his case. 6. On the other hand, the counsel appearing for the first respondent submitted that, the complainant had not stated that the cheque was filled up in the handwriting of the revision petitioner and signed in his presence. He had only stated that, the cheque was brought duly filled, signed and handed over to him. So he had no case that, the 7 Crl. R. P. No.1033 of 2014 handwriting in the cheque was that of the revision petitioner. Further there is no necessity for issuing two blank singed cheques, at the time when the revision petitioner went abroad, for the purpose of paying the amount, which he was expected to send to his wife. If he wants, he could send the amount in the N.R.I. account to enable his wife to withdraw the same. Further the revision petitioner had no case that, any such amount sent by him was withdrawn by the complainant also from his account. Further his case also will go to show that, there were money transactions, between him and the complainant, till 2005 and he had repaid all the amount in 2005. But he had not taken any steps to get back the signed cheque or send any reply to the notice issued as well. Further the documents produced are all self serving documents and there is no admission on the part of the complainant regarding the genuineness of the entries made by the revision petitioner in his personal diary. So according to the 8 Crl. R. P. No.1033 of 2014 counsel for the first respondent, the courts below were perfectly justified in convicting the revision petitioner for the offence under Section 138 of the Act and the concurrent findings of the court below on facts do not call for any interference. 7. The learned Public Prosecutor supported the case of the counsel appearing for the first respondent. 8. The case of the complainant in the complaint was that, revision petitioner borrowed a sum of 3,00,000/-₹ in the year 2007 from him and in discharge of that liability, he had issued Ext.P1 cheque. The case of the revision petitioner was one of total denial. His case was that, the complainant is none other than his brother-in-law and when he went abroad during 1991, he had entrusted two blank singed cheques to the complainant, as security for payment of the amount to his wife, from the amount which he expected to send from abroad, as his wife is not conversant with the banking transaction. Further all the transactions Crl. R. P. No.1033 of 2014 9 between the revision petitioner and the complainant from 1995 to 2005 were settled and there was no amount due from him to the complainant. In fact, 3,00,000/- is due from₹ the complainant to him. There is no dispute regarding the proposition laid down in the decision reported in **Mahesh Kumar v. Taxi Drivers Co-operative Society Ltd., (2010(4) KLT 544)** and **Gopan v. Tonny Varghese (2008(1) KLT 257)** relied on by the counsel for the revision petitioner. It is true that, once execution of the cheque is denied, then the burden is on the complainant to prove the same. In the decisions relied on by the counsel for the revision petitioner it is also stated that, there must be some evidence adduced on the side of the complainant to prove the execution and mere production of the cheque or mere admission of the signature of the accused in the cheque, alone are not sufficient to prove the execution of the cheque as well. 9. In this case PW1 had gone to the witness box 10 Crl. R. P. No.1033 of 2014 and had deposed about the transaction. Further it is no where stated in the complaint or in the deposition of PW1 that, the entire writings in the cheque was that of the revision petitioner and they were made in his presence. What was stated in the complaint and in the deposition was that, the revision petitioner had delivered the cheque from his house. Further in the cross examination he had stated that, the cheque was brought duly filled and signed in his presence and it was delivered. Further the revision petitioner had not taken any steps to prove that, the entries in the cheque were not his. So under the circumstances, courts below were perfectly justified in coming to the conclusion that, the evidence adduced on the side of the complainant is sufficient to prove the execution and delivery of the cheque. 10. As regards the other contentions mentioned, the case of the revision petitioner is that, one of the cheques issued in the year 1991, as the security for 11 Crl. R. P. No.1033 of 2014 payment of the amount, that was likely to be sent by the revision petitioner to his wife was mis-used and the present complaint was filed. If that is the case, there is no necessity for issuing any cheque as a security, as he will be sending the amount through the account and that will be paid by the complainant to his sister, who is the wife of the revision petitioner. So at that time, there was no necessity to obtain any cheque as claimed by him as security. Further the evidence of DW1 and the documents produced by him marked as Exts.D1 to D5 also will go to show that, there were money transactions between the complainant and the revision petitioner and he had discharged the same. If really there was no money transaction as borrower, then there is no question of discharge arises. Further as rightly observed by the courts below, in none of the entries in the diaries maintained or the statement produced by the revision petitioner, there is anything to indicate that, it was acknowledged by the complainant as well, by either putting Crl. R. P. No.1033 of 2014 12 his signature or by making endorsement, as he has received the amounts shown as well. According to the revision petitioner, the transactions were over in the year 2005, but he had not taken any steps to get back the cheques from his brother-in-law, the complainant. He did not issue any stop memo also to the bank, not to honour the cheque, as the transaction for which the cheques were given has been accomplished and there is no necessity to keep the cheque with the person to whom it was said to have been given as security after the purpose is completed. So under the circumstances, courts below were perfectly justified in disbelieving the case of the revision petitioner that, the cheque was given in the year 1991, as security for payment of the amount to his wife, which the revision petitioner was expected to send from abroad through the complainant as it is an un-believable case and rightly believed the evidence of PW1 and came to the conclusion that, the revision petitioner had borrowed the amount and issued the cheque Crl. R. P. No.1033 of 2014 13 in discharge of that liability. 11. It is true that in the decision reported in **(2009(2) KLT 897) Bhaskaran Nair v. Mohanan** , a reference has been made regarding the provisions of the Income Tax Act and it is observed that, a loan transaction beyond a sum of 20,000/- otherwise than by cheque or₹ draft, it has to be noted, is interdicted under Section 269 (SS) of Income Tax Act, which came into force from 01.04.1984 and any infraction there of liable to be punished under Section 217(d) of the above Act. It cannot be treated as a proposition, that any transaction in violation of that provision, will make the transaction itself unenforcible through court of law. It was only observed in that decision that, that has to be taken into consideration while considering the facts of that case to arrive at a conclusion, as to whether the transaction alleged by the complainant is believable or not. It was a case where the complainant was a partner of a money lending firm having money lending 14 Crl. R. P. No.1033 of 2014 licence and doing business in money lending, who is expected to do transaction in accordance with law. Further the evidence of the complainant in that case was that, this amount was not shown in the account of the firm and it was not mentioned in the Income Tax return of the firm and he had only informed about the same to his son alone, coupled with the fact that, such a huge amount was paid by cash/ by a partner of the firm, when a loan was taken was viewed by this court, as a suspicious one to disbelieve the case of the complainant. So that cannot be taken as a proposition laid down that, any transaction by a hand loan given by ordinary persons, will make it an unenforcible one and any cheque given in discharge of such liability cannot be treated as a cheque issued in discharge of a legally enforcible debt, so as to maintain an action under Section 138 of the Act. Further any violation of a particular Act, which may lead to a penal offence in that Act, will not affect the transaction as such illegal, though it may give a cause of action for that 15 Crl. R. P. No.1033 of 2014 department, to initiate action, against the person, who violated the provisions of that Act. 12. Further in the decision reported in **(1999(2) KLT 634) Abdul Gafoor v. Abdurahiman** , it has been held that, merely because the complainant /partnership is not registered one, that will not prevent the complainant firm by filing a complaint under Section 138 of the Negotiable Instruments Act, in respect of a cheque given by the accused, in discharge of a liability for the amount due to the complainant firm, as it will not affect the criminality of the transaction, that has been committed by the accused and the effect of non-registration of the partnership of a firm under Section 69 of the Partnership Act has no application to criminal cases. Further in the decision reported in **(1999(2) KLT 512) Nadarajan v. Nadarajan** , this court has held that merely because the chitty was conducted in violation of Section 3(1) of the Chitties Act, 1975, it will not make the transaction void and it only 16 Crl. R. P. No.1033 of 2014 peanalise the foreman for violation and it does not declare the transaction as illegal or unlawful and the cheque issued in discharge of such liability will fall under the category issued in discharge of legally enforcible debt as contemplated under Section 138 of the Act. These two dictums were not considered by the learned Single Judge while deciding the case in Bhaskaran Nairs case (supra). So merely because the amount was given in cash though it was more than 20,000/-, which was expected to be given by₹ cheque or demand draft by the provisions of the Income Tax Act by itself will not make the transaction an illegal one, though it may give a cause of action for the Income Tax authorities to prosecute the person, who violated that provision. Further it will be seen from the evidence as well as the submission made by the counsel for the revision petitioner that, both the revision petitioner and the complainant were coming from village area, not conversant with these aspects fully as well. So under the Crl. R. P. No.1033 of 2014 17 circumstances, the dictum laid down in the decision in Bhaskaran Nairs case (supra) is not as such applicable to the facts of this case, to dis-believe the case of the complainant, so as to give the benefit of acquittal to the revision petitioner as claimed by the counsel for the revision petitioner. 13. Further he did not send any reply to the notice issued by the complainant, when the cheque was dishonoured as well. So that also will go a long way to show that, he did not send any reply, because he has nothing to say about the allegations made in the notice. So under the circumstances, the courts below were perfectly justified in coming to the conclusion that, the revision petitioner had issued Ext.P1 cheque in discharge of his legally enforceable debt for the amount due from him to the complainant and the cheque when presented was dishonoured for the reason ‘funds insufficient’ and in spite of the notice issued, he had not paid the amount and Crl. R. P. No.1033 of 2014 18 thereby he had committed the offence punishable under Section 138 of the Act and and rightly convicted him for this offence and the concurrent findings of the court below on facts on this aspect do not call for any interference, as the courts below have not committed any illegality in recording the concurrent finding. 14. As regards the sentence is concerned, the counsel for the revision petitioner submitted that, revision petitioner had undergone a surgery and he is suspecting malignancy as well. So he prayed for leniency. The trial court had sentenced him to undergo imprisonment, till rising of the court and also to pay a fine of 3,20,000/-, in₹ default to undergo, simple imprisonment for five months. It is further ordered that, if the fine amount is realised, the same was directed to be paid to the complainant, as compensation under Section 357(1)(b) of the Code, in view of the dictum laid down in **[2013(4) KLT 350 (S.C.)] Somanath Sarkar v. Utpal Basu Mallick** , where the 19 Crl. R. P. No.1033 of 2014 Hon’ble Supreme Court has held that, there is no question of awarding compensation in 138 cases and court cannot impose fine more than twice the cheque amount and only if the court has determined the amount of fine, the question of paying compensation out of the same arises. In the same decision it has been observed that, it is a quasi civil nature, for which a criminal colour has been given by virtue of introducing Section 138 in the Act. Further in the decision reported in **Damodar S. Prabhu v. Sayed Babalal H. [JT 2010 (4) (S.C.)457]** , the Hon’ble Supreme Court has held that, the intention of the legislature is not to send the person to prison, but to see that, the amount is collected and paid to the payee from the drawer. So under the circumstances, the sentence of imprisonment, till rising of the court and fixing the fine amount as 3,20,000/- cannot₹ be said to be excessive. But at the same time, considering the fact that, the revision petitioner was aged 60 years even at the time when the complaint was filed and he would have 20 Crl. R. P. No.1033 of 2014 been much more older now, and suffering from illness, this court feels that, the default sentence can be reduced to two months imprisonment from five months simple imprisonment imposed by the court below. Further considering the amount involved, this court feels that, some time also can be given for payment of the amount. So the sentence is modified as follows: The revision petitioner is sentenced to undergo imprisonment, till rising of the court and also to pay a fine of 3,20,000/-, in default to undergo simple imprisonment₹ for two months. If the fine amount is realised, the same is directed to be paid to the complainant, as compensation under Section 357(1)(b) of the Code of Criminal Procedure. The revision petitioner is granted time, till 05.05.2015 to pay the amount. If the amount is paid directly to the complainant and if he produces proof of payment before the court below and that is being acknowledged by the complainant before the court below, then that will be Crl. R. P. No.1033 of 2014 21 treated as substantial compliance of the payment of compensation out of fine, as directed by the court below and confirmed by this court and the court below is directed to enter the same in the respective registers as provided in **(2010(2) KLT 1017) Beena v. Balakrishnan Nair and Another** and **(2012(4) KLT 21) Sivankutty v. John Thomas and Another** and permit the revision petitioner to undergo substantive sentence of imprisonment, till rising of the court. With the above modification of the default sentence alone and with the direction of granting time, the revision petition is allowed in part. Office is directed to communicate this order to the concerned court, immediately. Sd/- ## **K. Ramakrishnan, Judge** // True Copy // P.A. to Judge ss