Tomy K. Sebastian v. T. P. Saseendran and State of Kerala

## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN WEDNESDAY, THE 26TH MARCH 2008 / 6TH CHAITHRA 1930 CRL.A.No. 1465 of 2004 -------------------------------------- CC.354/2001 of JUDL.MAGISTRATE OF FIRST CLASS COURT, KUTHUPARAMBA .................... ## APPELLANT: TOMY K.SEBASTIAN, S/O. DEVASSIA, KURIYATH HOUSE, THONDIYIL. BY ADV. SRI.P.P.RAMACHANDRAN RESPONDENTS: 1. T.P.SASEENDRAN, S/O. GOVINDAN, THAVARAYIL PANAYAD HOUSE, THOTTUVASHI, NIDUMPOIL P.O. ## 2. STATE OF KERALA, REP. BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY ADV. SRI.P.NARAYANAN BY PUBLIC PROSECUTOR SRI.T.J.AMBOOKEN THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 26/03/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## K.P. Balachandran, J. --------------------------Crl.A.No. 1465 of 2004 --------------------------- ## **JUDGMENT** The complainant in C.C.No.354/01 on the file of the Judicial First Class Magistrate's Court, Kuthuparamba is the appellant. He assails in this appeal the judgment passed by the learned Magistrate in the above case acquitting the first respondent under Section 255(1) Cr.P.C. of offence punishable under Section 138 of the Negotiable Instruments Act. 2. The appellant filed the complaint in the court below alleging, inter alia, that himself and the first respondent are known to each other for the last several years; that while so, on the intervention of the first respondent, an amount of Rs.40,000/- was advanced to his friend P.A.Mathew in connection with a property transaction, but the transaction did not take place; that he did not get back the amount advanced and that he filed O.S.No. 234/99 before the Munsiff's Court, Kuthuparamba CRA 1465/04 2 against the said P.A.Mathew and the said suit was decreed on 10.10.2000 allowing the appellant to recover from the said P.A.Mathew an amount of Rs.30,000/- with interest thereon; that apart from that the first respondent borrowed an amount of Rs.10,000/- from the appellant on 30.5.1997 and on the same day, he executed an agreement in favour of the appellant, but, the first respondent did not repay the amount as per the terms of the agreement and therefore, the appellant filed O.S.No.129/99 before the Munsiff's court, Kuthuparamba against the first respondent and the said suit was decreed allowing the appellant to recover from the first respondent an amount of Rs.15,000/-; that the first respondent requested the appellant not to file execution petitions for execution of the said two decrees obtained by him offering that he would himself pay the entire amount due under both the decrees; that the appellant, therefore, did not approach the Execution Court for execution of the CRA 1465/04 3 decrees aforesaid; that while so, on mediation between the first respondent and the appellant, an amount of Rs.50,000/- was fixed as the amount payable to the appellant by the first respondent and in discharge of the said amount, the first respondent issued Exhibit P1 cheque dated 5.5.2001 to the appellant; that the appellant presented the said cheque for encashment and on 8.5.2001, it was returned dishonoured for reason of insufficiency of funds in the account of the first respondent to honour the same; that thereupon, on 11.5.2001, notice was issued to the first respondent through Lawyer intimating him of the dishonour of the cheque and demanding payment of the amounts covered by the cheque, but, that the first respondent has not paid up the amounts covered by the cheque either within the statutory period or ever thereafter and thereby he has committed an offence punishable under Section 138 of the Negotiable Instruments Act. CRA 1465/04 4 3. The learned Magistrate recorded the sworn statement of the appellant and registered the case on the file of his court as C.C.No.354/01, taking cognizance of the offence under Section 138 of the Negotiable Instruments Act. 4. On the first respondent entering appearance in the court below pursuant to receipt of summons, he was served with copies of all relevant records in the case and was questioned by the learned Magistrate, reading over the particulars of the offence and explaining it to him. Thereupon, he pleaded not guilty and consequently, a trial of the case was conducted by the court below. 5. On the side of the complainant, he gave evidence as PW1 and got marked in evidence Exhibits P1 to P5. On the complainant closing his evidence, the first respondent was questioned by the learned Magistrate under Section 313 Cr.P.C. Thereupon, he generally denied all incriminating circumstances appearing in evidence against him and maintained CRA 1465/04 5 that he is innocent. According to the first respondent, he had borrowed an amount of Rs.10,000/- from the appellant in 1997, executing an agreement and issuing a cheque and he has repaid an amount of Rs.5,000/- and he attempted to settle the transaction by making payment of the balance amount of Rs.5,000/- as well, but that the appellant insisted that the amount due from DW1 Mathew has also to be paid by him and then only the cheque would be returned and he filed a suit against him for recovery of the amount and the said suit was decreed for realisation of an amount of Rs.13,900/- and an execution petition for recovery of the said debt has been filed by the appellant and he has remitted an amount of Rs.6,000/- in the said EP and the EP was being posted for further payment; that it is incorrect to state that a cheque for an amount of Rs.50,000/- was issued to the appellant; that he has not taken up the liability of DW1; that he has issued reply to the CRA 1465/04 6 notice under Exhibit D6 postal registration receipt and that has been accepted also by the appellant under Exhibit D7 acknowledgment card. On the defence side the first respondent examined DW1 Mathew and he himself tendered evidence as DW2 and got Exhibits D1 to D7 marked in evidence. 6. The court below considered the case in the light of the evidence adduced as aforesaid; found the first respondent not guilty of offence punishable under Section 138 of the Negotiable Instruments Act and acquitted him of the said offence vide Section 255(1) Cr.P.C. Hence this appeal by the aggrieved appellant/complainant. 7. It is vehemently contended before me by the learned counsel for the appellant that the court below erred in acquitting the first respondent disbelieving the case of the appellant; that there is no taboo in law for one taking up the liability of another and issuing cheque in discharge of that liability and that the court below should have CRA 1465/04 7 accepted the case alleged in the complaint and found the first respondent guilty of offence punishable under Section 138 of the Negotiable Instruments Act. It is his further contention that if at all this Court finds that the amount due to the appellant is not exactly the amount covered by Exhibit P1 cheque, that will not exonerate the first respondent from the liability for offence under Section 138 of the Negotiable Instruments Act. He has relied on the decision of this Court in **Kochayippa v. Suprasidhan** (2002 (2) KLT 652) in support of his contentions. 8. Going by the allegations in the complaint filed by the appellant, he was advancing an amount of Rs.40,000/- to DW1 Mathew for purchase of a property and an amount of Rs.10,000/- by way of loan to the first respondent. For recovery of the advance amount paid to DW1 Mathew and for recovery of the loan advanced to the first respondent, suits were filed and decrees were obtained by the CRA 1465/04 8 appellant. It is the case of the appellant that the first respondent issued Exhibit P1 cheque offering to discharge the entire debt due from him and from DW1 Mathew asking the appellant not to execute the decrees either against him or against DW1 Mathew. On this aspect, there is absolutely no evidence, apart from the interested testimony of the appellant as PW1. The case of the first respondent, on the other hand, is that he was borrowing an amount of Rs.10,000/- from the appellant, executing an agreement and also issuing a blank cheque leaf. He has also a case that an amount of Rs.5,000/- was repaid and when he attempted to repay the balance amount of Rs.5,000/the appellant insisted for payment of the amounts due from DW1 as well by the first respondent and refused to return the cheque unless the said demand is complied with. 9. It is the definite case of the first respondent that he has not taken up the liability CRA 1465/04 9 of repaying the amounts due from DW1 Mathew. DW1 Mathew has also denied the suggestion put to him in cross-examination that Exhibit P1 cheque had been issued by the first respondent in discharge of the debt due from him and from the first respondent. DW1 does not claim for himself being got exonerated from the liability under the decree obtained against him. Thus, it is a case, where, the case of the appellant that the liability of DW1 Mathew also has been taken over by the first respondent and that it was in discharge of that debt as well, along with the debt due from the first respondent that Exhibit P1 cheque was issued is disputed and denied both by the first respondent and DW1 Mathew. 10. The question, therefore, is as to whether exhibit P1 cheque was being issued in discharge of the debts due from the first respondent and DW1 Mathew, as alleged by the appellant. There is not even a suggestive question put to the first respondent in cross-examination, while he tendered CRA 1465/04 10 evidence as DW2 disputing his case, of his having availed of a loan of Rs.10,000/- from the appellant, executing an agreement and also delivering a cheque. In the circumstances, the contention of the counsel for the appellant that there is no case for the first respondent that a blank signed cheque leaf was given and not Exhibit P1 cheque, has to be taken as a circumstance against the first respondent is not sound and cannot be accepted. If at all, as is alleged by the appellant, Exhibit P1 cheque was being issued in discharge of the debts due under two decrees stated in the complaint and obtained against DW1 and the first respondent, certainly some other document would have been got executed in that behalf and the matter reported before the Execution Court, in the absence of which the transaction under Exhibit P1 can very well be contended to be a transaction independent of the liabilities under the two decrees obtained against DWs 1 and 2. CRA 1465/04 11 11. The preponderance of probabilities suggest that only the case of the first respondent that a blank cheque leaf was being received from him over and above getting executed an agreement when the appellant advanced an amount of Rs.10,000/- to him is alone probable than the case set up by the appellant that Exhibit P1 cheque was being issued in discharge of the debts due under the two decrees obtained by him against DWs 1 and 2. To that extent, I am constrained to accept the case of the first respondent as true and disbelieve the case of the appellant. It is then that the counsel for the appellant presses into service a decision of this Court in **Kochayippa's case** (cited supra), wherein, this Court held that the words “in whole or in part” of any debt or other liability appearing in Section 138 of the Negotiable Instruments Act denotes that even if cheque is issued for a lesser amount than the actual amount of consideration, still, a cause of action would be available to the CRA 1465/04 12 payee under Section 138 of the Negotiable Instruments Act and if that is so, the question of a cheque for a larger amount than what is actually received by the drawer also would make no difference, provided the entire amount so mentioned is necessary to discharge the debt or legal liability. In the case cited, M.R.Hariharan Nair, J., as he then was, was dealing with a case, where a cheque was issued for an amount of Rupees one lakh, whereas the actual sum advanced was only Rs.80,000/-. It was in that context that it was observed that even if a cheque is issued for a larger amount than what is actually received by the drawer, that would make no difference, provided, the entire amount so mentioned is necessary to discharge the debt or other legal liability. That decision has no bearing to the facts of this case, when it is found that the first respondent was receiving only an amount of Rs.10,000/- from the appellant and the appellant was getting an CRA 1465/04 13 agreement executed and was also obtaining a blank cheque by way of security. This means that the amount of Rs.50,000/- was not being filled up at the time of delivery and it was subsequently being inserted without the knowledge and consent of the drawer. Even according to the appellant, the amount of Rs.50,000/- covered by Exhibit P1 cheque takes in also the debt due from DW1 Mathew under the decree obtained against him by the appellant, which means that the full amount covered by the cheque is not the amount due from the first respondent to the appellant. The appellant has also miserably failed to establish that the first respondent was taking up the liability of DW1 Mathew and even DW1 Mathew has no case that his liability under the decree was taken over by the first respondent. 12. In the circumstances, the decision in **Padmanabha Panicker v. Tomy** (1991 (2) KLT SN 1), relied on by the counsel for the appellant to contend that enforcement of liability through civil CRA 1465/04 14 court will not disentitle the aggrieved person from prosecuting an offender under Section 138 of the Negotiable Instruments Act, has no application at all in the instant case. Similarly, the contention that prosecution for offence under Section 138 of the Negotiable Instruments Act will lie even if a cheque is issued by the drawer in discharge of the liability of another advanced, on the basis of the decision of this Court in **Sanal Kumar v. Rajeev Kumar** (2004 (1) KLT 689), has no application to the facts of this case. The decision of the Apex Court in **I.C.D.S.Ltd. v. Beemna Shabeer** (AIR 2002 SC 3014) also has no application at all to the facts of this case, as the said case was one wherein complaint was filed on the basis of a cheque issued by a guarantor in discharge of the liability of the principal debtor. 13. For all the reasons discussed above, the case of the appellant that the first respondent has committed an offence punishable under Section 138 CRA 1465/04 15 of the Negotiable Instruments Act consequent on dishonour of Exhibit P1 cheque for reason of insufficiency of funds in his account to honour the same is not tenable and the question of complying with the statutory formalities do not have any bearing at all as far as this case is concerned. The appeal, in the circumstances, deserves only to be dismissed, confirming the acquittal of the first respondent by the court below under Section 255(1) Cr.P.C. of offence under Section 138 of the Negotiable Instruments Act. In the result, confirming the correctness of the acquittal of the first respondent of offence punishable under Section 138 of the Negotiable Instruments Act, I dismiss this criminal appeal. 26[th] March, 2008 (K.P.Balachandran, Judge) tkv