Tenrose Capital Services Limited v Foreword Advertising & Marketing Private Limited and others

CRL.A.No.1832 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.1832 OF 2005** **AGAINST THE JUDGMENT IN CC 1667/1999 DATED 09-06-2005 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (E&O),ERNAKULAM** ## **APPELLANT/COMPLAINANT:** **TENROSE CAPITAL SERVICES LIMITED, 61/2939, SRM ROAD, COCHIN 682 018, REPRESENTED BY ITS DIRECTOR P.P.ZIBI JOSE.** **BY ADVS. SRI.JOSEPH MARKOSE (SR.) SRI.MATHEWS K.UTHUPPACHAN** ## **ACCUSED/RESPONDENTS 1 TO 4:** |**1**|**FOREWORD ADVERTISING & 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 LTD.,**| ||**RESIDING AT 34/502, CHAITHANYA,**| ||**PADIVATTOM, KOCHI 24.**| |**3**|**MURALI MOHAN M.S., DIRECTOR**| ||**FOREWORD ADVERTISING AND MARKETING PVT.LTD.,,**| ||**RESIDING AT MANNAPPASSERIL,**| ||**NANTHIATTUKUNNAM, N.PARUR.**| |**4**|**R.RAMACHANDRAN NAIR, DIRECTOR,**| ||**FORWORD ADVERTISING AND MARKETING PVT.LTD.,**| ||**KOCHUKARI HOUSE,**| ||**MUTTATHIPARAMBU, CHERTHALA.**| CRL.A.No.1832 OF 2005 2 **5 LYREX.A.J, DIRECTOR FORWORD ADVERTISING AND MARKETING PVT.LTD., RESIDING AT LYREX VILLA, ATTATHARA, KUNDANNUR, TRICHUR. 6 GEORGE JOHN KOOLAS, DIRECTOR, FORWORD ADVERTISING AND MARKETING PVT.LTD., PUTHUPPARAMBIL, EDAYAPPARA JN, KANGAZHA, KOTTAYAM. 7 THOMAS GEORGE, DIRECTOR, FOREWORD ADVERTISING AND MARKETING PVT.LTD., RESIDING AT 81 APPASWAMY STREET, HARIGATTU ROAD, CHETPET, MADRAS 600 031. 8 STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **R3-6 BY ADV. SRI.ALAN PAPALI R3-6 BY ADV. SRI.GILBERT GEORGE CORREYA 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.1832 OF 2005 3 ## **JUDGMENT** ## **Dated this the 22nd day of June 2020** The above appeal is filed by the complainant in C.C.No.1667/1999 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.1474/2005. In all these appeals, the accused are the 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 of notice was not complete to respondents Nos.1 and 2 in this appeal. When this appeal came up on 17.3.2020, the following order was passed by this Court: “The learned counsel for the appellant seeks time to take steps. Issue notice by speed post to respondents 1 and 2 in the correct address within two weeks from today. Post along with Crl.A.Nos.1474/05 & 1831/05 after summer vacation.” CRL.A.No.1832 OF 2005 4 3. Thereafter the case came upon 5.6.2020. But no steps were taken by the appellant to serve notice. Hence this Court 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 2. 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 2. This Court directed the appellant to argue the appeal, and if there are any merits, this Court observed that time could be granted to serve notice to respondents 1 and 2. Accordingly, the learned counsel for the appellant addressed his arguments. 5. The complainant's case in brief is as follows: The complainant is engaged in the business of running consultancy in financial services and represented by its authorised signatory, Director Zibi Jose. The first accused is a company engaged in the business of advertising, second accused is its Managing Director and accused Nos.3 to 5 are its all time directors and accused 6 CRL.A.No.1832 OF 2005 5 and 7 are the directors who are in charge of the company. The accused in the discharge of the amount received by them, issued a cheque dated 29.12.1997, for Rs.2,48,768/- drawn on Bank of India, M.G.Road branch, Ernakulam and signed by the director V.N.Sreekanth, and second accused who are the authorised signatories. The complainant presented the cheque through the Corporation Bank, Ravipuram, Ernakulam but it was returned dishonoured with memo dated 22.1.1998 of the Bank of India stating that 'payments stopped by the drawer' and also stating 'account closed'. The complainant in the notice dated 2.2.1998 demanded payment of the amount, and the said notice was accepted by the accused but did not pay any amount. The accused thereby 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 P13. The defence also adduced evidence. 7. Ongoing through the evidence and the documents, the 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. CRL.A.No.1832 OF 2005 6 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 on 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 on 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 that has been closed before 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 on 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 accused. There is nothing to interfere with the acquittal order CRL.A.No.1832 OF 2005 7 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 CRL.A.No.1832 OF 2005 8 complex of the complainant company, the 2[nd] accused had kept signed blank 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: “15. PW1 during his cross examination has frankly admitted that the accused company started functioning at Sreekandam by using the address of his Infotechs Company wherein he was the Director. He was the power of attorney holder of the accused company for registering it. Ext.D4 is the memorandum of Association of the accused company. He admitted that the signature seen in the first page of the Ext.D4 is that of him. He has also signed after having made corrections and insertions in it. Ext.D5 is the certified copy of the Articles of Association of the accused company: Ext.D6 is the advertising charge letter meant for the accused company which is in the address of his company. Similarly Ext.D7 is the communication issued from Choice Trading Corporation which is also seen addressed in his name. He further admitted that he had given ample advices for the functioning of the accused company. Ext.D9 is a part of such advice given so. In Ext.D9 it is specifically stated as “I am very concerned with the future of your company especially in relation to the collections connected with business originated through Mr.Murali. He is working hard to make more and more losses for the company and the more business he do the more losses the company is making ...etc...etc....” From the very wordings in Ext.D9 it could be seen that he was so anxious about the functions of the accused company and if he was not so involved in the affair of the company and not holding any post, he would not have issued such a letter to the accused company. From this it could be seen that he had got every access to the day to day affairs of the accused company and the signed cheques were obtained in one way or other, got it misused and instituted the complaint also cannot be ruled out.” 13. In the light of the above findings of facts by the trial CRL.A.No.1832 OF 2005 9 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 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.1667/1999 on the file of the Additional Chief Judicial Magistrate, Economic Offices, Ernakulam. Sd/- ## **P.V.KUNHIKRISHNAN JUDGE** ## **ab**