Techno Management and Computer Services Private Limited v. Foreword Advertising and Marketing Private Limited and others

CRL.A.No.1474 OF 2005 1 # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN** **MONDAY, THE 22ND DAY OF JUNE 2020 / 1ST ASHADHA, 1942** ## **CRL.A.No.1474 OF 2005** **AGAINST THE JUDGMENT IN CC 1668/1999 DATED 09-06-2005 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (E&O),ERNAKULAM** ## **APPELLANT/COMPLAINANT:** **TECHNO MANAGEMENT AND COMPUTER SERVICES PRIVATE LIMITED, 69/2939, S.R.M.ROAD, COCHIN-692018, REPRESENTED BY ITS DIRECTOR-P.P.ZIBI JOSE.** **BY ADVS.** **SRI.JOSEPH MARKOSE (SR.) SRI.MATHEWS K.UTHUPPACHAN** ## **RESPONDENTS/ACCUSED:** **1 FOREWORD ADVERTISING AND MARKETING PRIVATE LIMITED, DIVISION NO.XXVIII, DOOR NO.455, CLUB LANE, KADAVANTHRA, KOCHI-20** - **2 K.G. RAGHAVAN** **MANAGING DIRECTOR, FOREWORD ADVERTISING AND MARKETING PRIVATE LIMITED, RESIDING AT 34/502, CHAITANYA, PADIVATTOM, KOCHI-24.** **3 MURALI MOHAN M.S DIRECTOR, FOREWORD ADVERTISING AND MARKETING PRIVATE LIMITED, RESIDING AT MANNAPPASSERIL, NANTHIATTUKUNNAM, N.PARUR.** **4 R.RAMACHANDRAN NAIR, DIRECTOR, FOREWORD ADVERTISING AND MARKETING PRIVATE LIMITED, RESIDING AT KOCHUKARI HOUSE, MUTTATHIPARAMBU, CHERTHALA.** CRL.A.No.1474 OF 2005 2 **5 LYREX A.J DIRECTOR, FOREWORD ADVERTISING AND MARKETING PRIVATE LIMITED, RESIDING AT LYREX VILLA, ATTATHARA, KUNDANNUR, TRICHUR. 6 GEORGE JOHN KOOLAS DIRECTOR, FOREWORD ADVERTISING AND MARKETING PRIVATE LIMITED, RESIDING AT PUTHUPARABIL, EDAYAPPARA JN., KANGAZHA, KOTTAYAM 7 THOMAS GEORGE DIRECTOR, FOREWORD ADVERTISING AND MARKETING PRIVATE LIMITED, RESIDING AT 81 APPASWAMY STREET, HARINGATTU ROAD, CHETPUT, MADRAS 31** - **8 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM** **R2 BY ADV. SMT.MARY DIAS R3-6 BY ADV. ALAN PAPALI R8 BY SR.PUBLIC PROSECUTOR SRI.B.JAYASURYA** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 22.06.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** CRL.A.No.1474 OF 2005 3 ## **JUDGMENT** ## **Dated this the 22nd day of June 2020** The above appeal is filed by the complainant in C.C.No.1668/1999 on the file of the Additional Chief Judicial Magistrate, Economic Offences, Ernakulam. Respondent Nos.1 to 7 herein are the accused in the above case. (Hereinafter the parties are mentioned in accordance with their rank before the trial court). 2. This appeal came up along with Crl.A No.1831/2005 and Crl.A No.1832/2005. In all these appeals, the accused are same. The prosecution was initiated by three separate companies under Section 138 of the Negotiable Instruments Act. All the appeals were admitted, and this Court issued notice to the respondents. But service was not complete to respondents Nos.1 and 7. When this appeal came up on 17.3.2020, the following order was passed by this Court: “Notice to respondents 1 and 7 not yet returned. The learned counsel for the appellant seeks time to take steps. Issue notice by speed post to respondents 1 and 7 in the correct address within two weeks from today. Post along with Crl.A.Nos.1831/05 & 1832/05 after summer vacation.” 3. Thereafter the case came up on 5.6.2020. But no steps were taken by the appellant to serve notice. Hence this Court CRL.A.No.1474 OF 2005 4 ## passed the following order on 5.6.2020. “In all these appeals, this Court passed an order on 17.3.2020 by directing the appellants to take steps to the respondents to whom notice is not served. No steps are taken by the appellants. Therefore, these appeals will be posted for disposal on 17.6.2020 in the defect list.” 4. This is an appeal filed in 2005. Even now service of notice is not complete to respondent Nos.1 and 7. Now about 15 years elapsed after filing this Criminal Appeal. The learned counsel for the appellant again requested for time to serve notice to respondent Nos.1 and 7. This Court directed the appellant to argue the appeal, and if there is any merit, this Court observed that time could be granted to serve notice to respondents 1 and 7. Accordingly, the learned counsel for the appellant addressed his arguments. 5. The complainant's case in brief is as follows: The complainant company is engaged in the business of development of software. The first accused company is engaged in the business of advertising. Second accused is its Managing Director, accused Nos.3 to 5 are all time directors and accused 6 and 7 are the directors who are in charge of the company and responsible of the affairs of the company. In September, 1996 the first accused through its directors approached the complainant for financial assistance towards working capital on undertaking to pay interest for the loan @ 24% per annum. Accordingly on 8.12.1996 the first CRL.A.No.1474 OF 2005 5 instalment of working capital of a sum of Rs.1,77,587/- was paid to the accused. On 19.12.1996 Rs.54,000/-, on 28.12.1996 Rs.51,584/-, on 13.1.1997 Rs.50,000/-, on 25.1.1997 Rs.86,563/- and Rs.13,216 and finally on 6.9.1997 Rs.2,00,000/- were paid. Of the said amount Rs.3,00,000/- was repaid by the accused on 14.7.1997. By letter dated 24.12.1997, the complainant demanded a sum of Rs.3,32,950/- advanced as working capital and which was the net amount as on the date of the demand. The accused in discharge of the amount so demanded, issued a cheque dated 29.12.1997 for Rs.3,32,950/- drawn on Bank of India, M.G.Road branch, Ernakulam duly signed by the Director V.N.Sreekanth and the second accused K.G.Raghavan, the authorised signatories. The complainant presented the cheque through State Bank of Travancore, Perumanoor branch, Ernakulam, but it was returned dishonoured on account of 'payment stopped by the drawer and 'account closed' vide memo dated 22.1.1998. The complainant thereupon issued a demand notice dated 2.2.1998, which was served on the accused, but no payment was made. Thus all the accused committed the offence punishable under Section 138 of the Negotiable Instruments Act. 6. To substantiate the case, the prosecution examined PW1 and marked Exts.P1 to P10. The defence also adduced evidence. 7. On going through the evidence and the documents, the CRL.A.No.1474 OF 2005 6 lower court found that the accused has not committed the offence and hence the accused were acquitted. Aggrieved by the acquittal order, this Criminal Appeal is filed. 8. The learned counsel for the complainant submitted that the order of acquittal passed by the trial court is per se illegal. The learned counsel submitted that the accused were acquitted mainly for the reason that the accused issued stop payment instruction to the bank before the date on which the alleged cheque is issued. Therefore the counsel relied the judgment of the Hon'ble Supreme Court in **Rangappa v. Sri Mohan (2010 KHC 4325)** and **Goaplast (P) Ltd. v. Chico Ursula D'Souza and another [(2003) 3 SCC 232].** The counsel also relied the Division Bench judgment of this Court in **Vathsan v. Japanari [2003(3) KLT 972]** . The counsel submitted that in the light of the above judgments, even if a cheque is issued against an account which has been closed prior to the date of drawal of the cheque, it comes within the fold of Section 138 of the Negotiable Instruments Act. The counsel also submitted that the learned Judge wrongly relied Ext.P8. The counsel vehemently argued that the other finding of the trial court are also unsustainable. 9. The learned counsel for accused Nos.3 to 7 submitted that the trial court considered all the aspects and acquitted the CRL.A.No.1474 OF 2005 7 accused. There is nothing to interfere with the acquittal order passed by the trial court. 10. After hearing both sides, the point for consideration is whether the accused committed the offence under Section 138 of the Negotiable Instruments Act. 11. It is true that, simply because the instruction is given to the bank for stop payment before the issuance of the cheque, there cannot be an acquittal of an accused holding that no offence under Section 138 of the Negotiable Instruments Act is made out, in the light of the judgment of the Apex Court in **Goaplast (P) Ltd.** (supra) and **Rangappa** (supra). The point was considered by the Division Bench of this Court, also in **Vathsan'** s case (supra). 12. The learned Magistrate acquitted the accused not because of that reason alone. The learned Magistrate found that one witness examined on the side of the complainant is Zibi Jose. He is the power of attorney holder of the complainant company. He frankly admitted that he was the power of attorney holder of the accused company. According to him, the accused company started functioning with the help of him. At this juncture, the case of the accused is to be considered. According to the accused company, while their company was functioning in the office complex of the complainant company, the 2[nd] accused had kept signed blank CRL.A.No.1474 OF 2005 8 cheques therein, and without his knowledge and consent, PW1 obtained the same and got signed and filled up the same and presented before the bank falsely to institute the present case. Considering this defence, the learned Magistrate observed like this: “12. PW1 during his cross examination has frankly admitted that he was the power of attorney holder of the accused company for registering it. In the application for registering the company, he put his signature in it. So is in the case of memorandum of Association of the accused company. Ext.D4 is the Memorandum of Association of the accused company and he was the person who made corrections in it. In Ext.D5, which is the Articles of Association of the accused company, in CC. 1667/99, also he has made necessary corrections and insertions in it. Ext.D6 is a letter sent, by the Director of Neelgiri Tea Estate Ltd. regarding a Demand Draft meant for the accused company, in the name of PW1. Similarly in Ext.D7 quotation for printing 200 copies for Choice Trading Corporation is also seen sent in his address. Ext.D9 is a letter sent by PW1 advising the accused company. On a reading of Ext.D9. it could be seen that he was so anxious about the functioning of the accused company and if he was not involved in the day to day affairs of the accused company and not holding any post, he would not have issued such a letter to the accused company. As already stated, several communications meant for the accused company are seen issued in the name of PW1. When he was asked whether a complaint is pending before the Additional Chief Judicial Magistrate, Ernakulam for having stolen cheques he stated that he has appeared in that case. From this it could be seen that he had got every access to the day to day affaris of the company and the signed cheques were obtained in one way or other and got it misused and later instituted the complaint as contented by the defence cannot be ruled out.” 13. In the light of the above findings of facts by the trial court based on the evidence adduced by the complainant, I see no reason to interfere with the acquittal order of the trial court in an appeal against acquittal. The stop payment memo issued by the accused CRL.A.No.1474 OF 2005 9 must be considered in the light of the above factual situation. It is a finding of facts. Of course, as rightly pointed out by the learned counsel for the appellant, there is some factual error committed by the trial court while considering the balance sheet of the accused company with the alleged amount due to the complainant. But in the light of the specific findings of fact by the trial court, which is extracted above, I think there is nothing to interfere in an appeal against acquittal. Hence this Criminal Appeal is dismissed, confirming the judgment dated 9.6.2005 in C.C.No.1668/1999 on the file of the Additional Chief Judicial Magistrate, Economic Offices, Ernakulam. Sd/- **P.V.KUNHIKRISHNAN JUDGE** **ab**