Kerala High Court
Nedumangad Housing Co-Operative ... vs Nedumangad Housing Co-Operative ... on 29 March, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE K.HARIPAL
MONDAY, THE 29TH DAY OF MARCH 2021 / 8TH CHAITHRA, 1943
CRL.A.No.1538 OF 2011
AGAINST THE JUDGMENT IN CRA 164/2011 OF SESSIONS COURT,
THIRUVANANTHAPURAM
ST No. 75/2010 OF JUDICIAL MAGISTRATE OF FIRST CLASS -III,
NEDUMANGAD
APPELLANT/RESPONDENT/COMPLAINANT:
NEDUMANGAD HOUSING CO-OPERATIVE SOCIETY LTD.,
NEDUMANGAD T.384,
REPRESENTED BY ITS
SECRETARY IN-CHARGE S.SAJEEVAN.
BY ADV. SRI.S.RAJEEV
RESPONDENTS/APPELLANT/ACCUSED/STATE:
1 STATE OF KERALA
REP.BY PUBLIC PROSECUTOR,
HIGH COURT OF KERALA,
ERNAKULAM.
2 G.LAL,
S/O GOPINATH
PUMMATHIL VEEDU,
CHANDRAMANGALAM,
ANAD P.O.,
NEDUMANGAD,
PIN-695 541.
R2 BY ADV. SRI.NEMOM CHANDRA BABU
SR.PP - SRI.M.S.BREEZ
THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 25-03-2021,
THE COURT ON 29-03-2021 DELIVERED THE FOLLOWING:
CRL.A.No.1538 OF 2011
2
JUDGMENT
This is an appeal preferred under Section 378(4) of the Code of
Criminal Procedure, hereinafter referred to as the Cr.P.C., canvassing the
correctness of the judgment of the Sessions Judge, Thiruvananthapuram
in Crl.A.No.164/2011. By the judgment the finding of conviction and
sentence imposed on the 2nd respondent who is the accused in
S.T.No.75/2010 of the Judicial First Class Magistrate Court-III,
Nedumangad was reversed and he was acquitted.
2. The proceeding was initiated by the appellant, the Nedumangad
Housing Co-operative Society Ltd. T-384, represented by its Secretary,
by preferring a complaint before the trial court. The allegation in the
complaint is that, the accused, 2nd respondent had issued a cheque in
favour of the appellant for Rs.22,890/-, in discharge of a legally
enforcible liability, drawn on Nedumangad branch of the State Bank of
Travancore. When the cheque was presented for encashment through the
Nedumangad branch of the District Co-operative Bank, it was returned
on 22.01.2008 due to insufficiency of funds. Thereafter, the appellant
CRL.A.No.1538 OF 2011
caused to issue a lawyer notice on 14.02.2008 demanding the amount;
though the notice was duly served on the 2 nd respondent, it was neither
replied nor the amount was paid and that gave a cause of action for
initiating the compliant alleging offence punishable under Section 138
of the Negotiable Instruments Act, hereinafter referred to as the Act.
Thus the complaint was instituted on 26.03.2008 before the trial court.
3. Pursuant to the summons, the 2nd respondent appeared and
pleaded not guilty. Thereafter two witnesses were examined on the side
of the appellant. Exts.P1 to P7 were also marked. When examined under
Section 313(1)(b) Cr.P.C., the 2nd respondent reiterated the earlier plea
of innocence and denied all the incriminating materials. No evidence
was adduced in defence by the 2nd respondent. After hearing counsel on
both sides, by judgment dated 13.01.2011, repelling the plea of
innocence, the learned Magistrate found the appellant guilty of offence
punishable under Section 138 of the Act and sentenced to undergo
simple imprisonment for three months and to pay a fine of Rs.22,890/-
which was directed to be paid as compensation under Section 357(3) of
the Cr.P.C; a default sentence was also imposed on the 2nd respondent.
4. The 2nd respondent challenged the said finding in appeal before
CRL.A.No.1538 OF 2011
the Sessions Court, Thiruvananthapuram, which was taken on file as
Crl.A.No.164/2011. After hearing counsel on both sides, by the
impugned judgment, the learned Sessions Judge allowed the appeal by
reversing the finding of guilt, and the 2nd respondent was acquitted. That
finding has been called in question by the complainant after taking leave
of this Court under Section 378(4) of the Cr.P.C.
5. I heard counsel on both sides. The trial court records were
summoned and perused.
6. The learned counsel for the appellant/complainant has disputed
the findings of the learned Sessions Judge. According to him, the 2 nd
respondent has not disputed the document in question, namely the
Ext.P3 cheque, which was issued in discharge of a legally enforcible
liability. The 2nd respondent is a member of the housing society; he had
subscribed a scheme for the renovation of his house and drew
Rs.18,500/- agreeing to repay the same in monthly instalments. After
making certain initial instalments, he failed to repay the amount. When
persuaded, he came to the society and gave the Ext.P3 cheque, after
making them believe that he has sufficient amount in credit in the
account. But the cheque was bounced on presentation. The lawyer
CRL.A.No.1538 OF 2011
notice was not replied, nor the amount was paid and that made the
appellant to move the trial court. The learned counsel strongly
supported the finding of the trial court. According to him, the learned
Sessions Judge did not appreciate the evidence and circumstances in
proper perspective. The appellant could discharge the initial burden; as
provided under the statute he is entitled to draw the presumptions under
Sections 118(a) and 139 of the Act. But the 2nd respondent has failed to
rebut the presumptions and therefore the appellant is entitled to get a
finding in his favour. According to the learned counsel, the contentions
of the 2nd respondent that the Ext.P3 was given as security for the money
drawn by him and that he has already discharged the liability, are not
available to him. There is also no inconsistency in the version of PWs 1
and 2. The learned counsel also placed reliance on the decisions
reported in Bir Singh v. Mukesh Kumar [AIR 2019 SC 2446], Uttam
Ram v. Devinder Singh Hudan and another [2019 (5) KHC 179],
APS Forex Services Pvt.Ltd. v. Shakti International Fashion
Linkers and others [AIR 2020 SC 945] and also Kalamani Tex and
another v. Balasubramanian.P. [I.L.R.2021 (1) kerala 855].
7. On the other hand, the learned counsel for the 2 nd respondent
CRL.A.No.1538 OF 2011
strongly supported the finding of the learned Sessions Judge. According
to him, there are inconsistencies in the versions of PWs 1 and 2.
Though the scheme had ended in 2005, it is not known as to how a
cheque could be issued in 2008 as alleged by the appellant. The
appellant could not prove that he is entitled to draw the presumptions
under Sections 118 and 139 of the Act. In order to rebut the
presumptions, the accused need not enter the box or adduce evidence.
The entire circumstances brought out in evidence are sufficient to
disbelieve the version of the appellant/complainant. Similarly, the
failure of the appellant to produce the statement of accounts also is
relevant. If the documents were produced, the burden would have
shifted to the 2nd respondent; on the failure of the appellant to produce
such documents, he has no burden to discharge. According to the
learned counsel, the appeal is only to be dismissed. He also filed an
argument note mainly harping on the point that the degree of proof of
the accused in a prosecution under Section 138 of the Act is only by way
of preponderance of probabilities. Various authorities are also noted in
the argument note.
8. I have gone through the entire records and also the judgment of
CRL.A.No.1538 OF 2011
the trial court as well as the appellate judgment of the Sessions Judge.
Appellant is a Housing Co-operative Society, a society registered under
the provisions of the Kerala Co-operative Societies Act. The learned
counsel for the appellant has pointed out that the 2 nd respondent is a
member of the society and in that capacity he had enrolled himself as a
subscriber to a scheme for renovation of his house. Ext.P2 document
suggests that he had obtained an amount of Rs.18,500/- on 05.03.2005.
From the evidence it seems that the amount had to be repaid in monthly
instalments. The 2nd respondent had remitted some amount towards
repayment. But when he defaulted, he was approached by the officials
of the bank, then he reached the bank. PWs 1 and 2 have stated that at
that time, an amount of Rs.22,890/- was due and in consideration of the
amount Ext.P3 cheque was issued. The materials on record indicate that
when the cheque was presented for encashment, it bounced due to
insufficiency of fund. Then the 2nd respondent was notified by sending a
lawyer notice, which was not replied. Thus a cause of action for
prosecution arose and that was how the appellant moved the trial court
with a complaint alleging offence punishable under Section 138 of the
Act.
CRL.A.No.1538 OF 2011
9. After considering the rival contentions and evidence, the
learned Magistrate upheld the arguments of the appellant. It was noticed
that, the execution of the cheque was admitted; similarly, he had failed
to prove the plea of discharge and since it was contended that the
cheque was issued as security; both the arguments were not acceptable
to the court and the learned Magistrate proceeded to convict the 2 nd
respondent as stated supra. Against that conviction, when appeal was
preferred, the learned Sessions Judge reversed the finding on various
reasons. According to him, it was a house deposit scheme, which had
completed in the year 2005, and therefore, there is no possibility of
issuing a cheque as claimed by the appellant on 22.01.2008. Similarly,
the learned Judge also took serious note of the fact that the appellant had
not produced the statement of accounts, though PW1 had agreed for the
same. The Sessions Judge also noticed inconsistency with regard to the
date of issuance of the cheque between the testimony of PWs 1 and 2
and that on consideration of these aspects, the version of the 2 nd
respondent was accepted and thus the finding of conviction was
reversed.
10. After giving my thoughtful considerations, I do not find my
CRL.A.No.1538 OF 2011
way to approve the finding of the learned Sessions Judge. As noted
earlier, the appellant is a co-operative society, which is guided by the
provisions of the Co-operative Societies Act. In no stretch of
imagination it could be thought, nor it was suggested that a document
was fabricated by the officials of the society for the purpose of
deceiving one of its own members for getting enrichment of the society.
In fact, that itself is the strength of the prosecution case.
11. Secondly, as noticed by the trial court, there is no serious
dispute with regard to the execution of the Ext.P3 cheque. Both PWs 1
and 2 have stated that the instrument was issued after the 2 nd respondent
had defaulted monthly repayments and amounts had fallen in lump
towards repayment of monthly instalments due to the society. Then the
2nd respondent reached the society and handed over the Ext.P3 cheque,
which version cannot be ignored. The Ext.P2 document reveals that he
had received an amount of Rs.18,500/- in the scheme on 05.03.2005.
The consideration shown in Ext.P3 is the amount outstanding, together
with interest accrued. This fact cannot be eschewed for the mere reason
that the statement of accounts was not produced by the appellant.
12. As noticed by the trial court, the appellant, after not denying
CRL.A.No.1538 OF 2011
the execution of the document, has taken up a plea of discharge. It is
trite law that when a plea of discharge is raised, it is for the person to
prove the same. Here, no attempt has been made by the 2nd respondent to
say that the entire amount received by him under Ext.P2 has been
repaid.
13. Similarly, when PWs 1 and 2 were cross examined, it has been
put to him that Ext.P3 was issued as a security for the transaction. No
contention was raised to say that Ext.P3 is not supported by
consideration. It is here that the decision of the Hon'ble Supreme Court
in Bir Singh's case, quoted supra, assumes importance. The initial
burden of the complainant in such a case is to prove the transaction.
Once issuance of the cheque is admitted or proved, necessarily he is
entitled to draw the presumptions under Sections 118(a) and 139 of the
Act. The Hon'ble Supreme Court in Bir Singh's case, cited supra, has
gone to the extent of saying that even if a blank cheque leaf is given,
voluntarily signed by the accused towards some payment, presumption
under Section 139 of the Act will be attracted. It is true that the 2 nd
respondent has not disputed his signature on the Ext.P3 cheque. He does
not know who had incorporated other writings. According to PWs 1 and
CRL.A.No.1538 OF 2011
2 it were done by the person who had accompanied the 2 nd respondent
while handing over the cheque. Even assuming that the 2 nd respondent
had handed over a signed blank cheque, still the appellant is entitle to
draw the presumptions.
14. Paragraphs 37 and 38 of Bir Singh's case, quoted supra, are
relevant and is extracted here below:-
" 37. A meaningful reading of the provisions of the
Negotiable Instruments Act including, in particular, S.20,
S.87 and S.139, makes it amply clear that a person who
signs a cheque and makes it over to the payee remains liable
unless he adduces evidence to rebut the presumption that
the cheque had been issued for payment of a debt or in
discharge of a liability. It is immaterial that the cheque may
have been filled in by any person other than the drawer, if
the cheque is duly signed by the drawer. If the cheque is
otherwise valid, the penal provisions of S.138 would be
attracted.
38. If a signed blank cheque is voluntarily presented to a
payee, towards some payment, the payee may fill up the
amount and other particulars. This in itself would not
invalidate the cheque. The onus would still be on the
accused to prove that the cheque was not in discharge of a
debt or liability by adducing evidence."
The above decision has been followed by a three Judge Bench of the
CRL.A.No.1538 OF 2011
Supreme Court in Kalamani Tex, quoted supra.
15. It was contended that the learned Sessions Judge has approved
the version that the scheme had ended in 2005 and in such a case a
cheque might not have been issued in 2008. It may be true that the
scheme might have been ended in 2005; but that does not mean that, by
the time all the remittances due to the bank were completed. The case of
the 2nd respondent is the best illustration to say that he had not paid back
the entire monthly dues, which made the authorities to follow him up for
getting back the amount.
16. The other contention that there is difference in the date spoken
by the witnesses etc., has no relevance. The Ext.P3 bears a clear date,
which itself is the case of the appellant. On evaluation of the entire facts
and circumstances, I find that the appellant has proved the case beyond
doubt, which entitles him to draw the presumptions under Sections 118
and 139 of the Act. The 2nd respondent did not even respond to the
lawyer notice. It is true that no adverse inference can be drawn against
the 2nd respondent for not sending the reply or not having mounted the
box. The presumptions can be rebutted by him through other means also.
But here, he has not rebutted the presumptions, nor taken any legally
CRL.A.No.1538 OF 2011
tenable contention to displace the presumptions available in favour of
the appellant and that enables the appellant to get an order in his favour.
17. Thus, in reversal of the finding of the Sessions Judge, the
conviction entered by the trial court is restored. Resultantly, the 2 nd
respondent is sentenced to pay a fine of Rs.30,000/- (Thirty Thousand
only), failing which he shall undergo simple imprisonment for three
months.
Appeal allowed as above.
Sd/-
K.HARIPAL
JUDGE
Jms/25.03
//True Copy// P.A to Judge.
