Kerala High Court
P.G.Koshy Panicker vs State Of Kerala on 24 January, 2025
CRL.A NO. 559 OF 2007
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MRS. JUSTICE SOPHY THOMAS
TH
FRIDAY, THE 24
DAY OF JANUARY 2025 / 4TH MAGHA,
1946
CRL.A NO. 559 OF 2007
Crl.L.P. NO.164 OF 2007 OF HIGH COURT OF KERALA
Crl.A NO.311 OF 2002 OF ADDITIONAL SESSIONS COURT
(AD HOC-III), KOLLAM
CC NO.447 OF 1999 OF JUDICIAL FIRST CLASS MAGISTRATE
COURT-I, KOLLAM
APPELLANT/COMPLAINANT:
.G.KOSHY PANICKER,
P
PUSHPA MANGALATH FINANCIERS & CHITTY FUND,
HOSPITAL JUNCTION, KUNDARA P.O., KOLLAM.
BY ADVS ARUN BABU(K/1240/2004)
RESPONDENTS/STATE AND THE ACCUSED:
1
HE STATE OF KERALA
T
REPRESENTED BY THE PUBLIC PROSECUTOR,
HIGH COURT OF KERALA, ERNAKULAM.
2
REMA CHANDRAN,
P
SANKAR BHAVAN, NETTAYAM P.O., ELAMADU, KOLLAM.
1 BY SR. PUBLIC PROSECUTOR SRI.RENJIT GEORGE
R
R2 BY ADVS.
P.GOPALAKRISHNAN (MVA)
A.N.RAJAN BABU
N.B.RAJU
THIS
CRIMINAL
APPEALHAVING
BEEN
FINALLY
HEARD
ON
24.01.2025,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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J U D G M E N T
This appeal is at the instance of the complainant in CC
No.447of1999onthefileofJudicialFirstClassMagistrateCourt-I,
Kollam,assailingthejudgmentinCrl.AppealNo.311of2002onthe
fileofAdditionalSessionsJudge(AdHoc-III),Kollam,bywhich,the
accused was acquitted under Section 138 of the Negotiable
InstrumentsAct(hereinafterreferredas'theNIAct'),reversingthe
judgment of conviction and sentence by the trial court.
2. The case of the complainant is that theaccusedborrowed
Rs.3,00,000/- from him and issued Ext.P1 cheque dated
11.01.1999 towards discharge of that amount, assuring that it
would be honoured on presentation before the bank. But, that
chequewasreturneddishonouredforthereason'fundsinsufficient'.
He sent a registered lawyer notice to the accused intimating
dishonour of the cheque, and demanding the cheque amount. In
spiteofreceiptofnotice,theamountwasnotrepaidandhencethe
complaint.
3. On taking cognizance and on appearance of the accused
before the trial court, particulars of offence was read over and
explained, to which he pleaded not guilty and claimed tobetried.
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PWs1 and 2 were examined and Exts.P1 to P6 were marked from
the side of the complainant.Onclosureofcomplainant'sevidence,
accused was questioned underSection313ofCr.P.C.Hedeniedall
the incriminating circumstances brought on record andstatedthat
he never borrowed any amount from the complainant. He had
subscribed a chitty with one Smt.Ammukutty Alex and on
auctioningthechittyandreceivingthechittyamount,hehadgiven
a blank cheque to her, as security for payment of future
instalments. He defaulted the future instalments and to clear that
liability,hehadtransferredhispropertyinherfavourasperExt.D3
sale deed. Even then, the blank cheque given by him, was not
returned to him by Smt.Ammukutty Alex. Misusing his blank
chequeleafinthenameofthecomplainant,whoisamoneylender,
a false complaint was filed through Adv.Kallada P. Kunjumon, who
isnoneotherthanthebrotherofSmt.AmmukuttyAlex.DWs1to5
were examined and Exts.D1 to D9 were marked from defence side.
4. On analysing the facts and evidence and on hearing the
rivalcontentionsfromeitherside,thetrialcourtfoundtheaccused
guilty under Section 138 of the NI Act, and he was convicted and
sentencedtoundergosimpleimprisonmentforoneyearandtopay
compensation of Rs.3,25,000/-. Aggrieved by the conviction and
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sentence, the accused preferred Crl.Appeal No.311 of2002before
Additional District and Sessions Court (Ad Hoc-III), Kollam. The
appellatecourtallowedtheappeal,settingasidetheconvictionand
sentence and the accused was acquitted of the offences alleged
under Section 138 of NI Act. Aggrieved by the acquittal of the
accused, the complainant has come up with this appeal.
5. Heard learned counsel for the appellant/complainant and
learned counsel for the 2nd respondent/accused.
6. Learned counsel for the appellant/complainant would
contendthat,theaccusedwasnotdisputinghissignatureinExt.P1
cheque and so the complainant was eligible to get the
presumptions available under Sections 118 and 139 oftheNIAct.
Hence, the appellate court ought not have acquitted the accused,
reversing the judgment of conviction and sentence by the trial
court.
7.Learnedcounselforthe2ndrespondent/accusedwouldsay
that the accused had never borrowed any amount from the
complainant, and he had never issued Ext.P1 cheque to him
towards discharge of any debt. His definite case from the very
outsetwasthat,hehadsubscribedachittyrunbySmt.Ammukutty
Alexintheyear1993andhebidthatchittyintheyear1996andto
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assurepaymentoffutureinstalmentsofthatchitty,hehadissueda
blank signed cheque to her. He is admitting default of the chitty
instalments and accordingtohim,hehadexecutedaSaleDeedof
hispropertyinfavourofSmt.AmmukuttyAlextowardsdischargeof
that liability. Ext.D3 is the certified copy of that Sale Deed dated
25.03.1996 executed by the accused in favour of Smt.Ammukutty
Alex. The blank cheque given by the accused wasnotreturnedby
her and only to seewhethersomemoremoneycouldbesnatched
away from him, that cheque was misused in the name of the
complainant, who was a money lender running Pushpamangalath
Financiers and Chitty Fund, and a complaint was filed through
Adv.Kallada P. Kunjumon, the brother of Smt.Ammukutty Alex.
8. DW2 is Smt.Ammukutty Alex, examined from the side of
the accused. She admitted that the accused had subscribed chitty
No.6/93 run by her, with a sala of Rs.50,000/-. She further
admitted that when chitty is auctioned, security will be received.
Butaccordingtoher,Ext.P1chequewasneverreceivedbyher,asa
security for the chitty auctioned by the accused.
9. The complaint was filed by Sri.P.G.Koshy Panicker as the
Proprietor of Pushpamangalath Financiers and Chitty Fund. But in
thecomplaint,hehasnocasethat,theamountwasadvancedfrom
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PushpamangalathFinanciersandChittyFund.Theavermentsinthe
complaint will give an impression that it was a personal loan
availed by the accused from the complainant. But he produced
Ext.D6-copy of ledger of Pushpamangalath Financiers and Chitty
Fund to show that Rs.3,00,000/- was advanced to the accused
from Pushpamangalath Financiers and Chitty Fund on11.01.1999.
But on going through Ext.D6 document, it could be seen that on
11.01.1999,theamountavailablewithPushpamangalathFinanciers
and Chitty Fund was only Rs.1,58,816/-. So there was no
probability for advancing Rs.3,00,000/- to the accused, from that
Financiers, on 11.01.1999. Moreover, on going through that
document, all the entries, except the entry relating to the loan of
Rs.3,00,000/- advanced to the accused, are with respect to gold
loans.Thegoldloansadvancedandthebalanceavailableshownin
the columns, will clearly show that, the name of the accused and
the amount Rs.3,00,000/- are subsequent insertions, as the
amount available on 11.01.1999 as Rs.1,58,816/- is reduced to
Rs.1,57,416/- after advancing gold loan of Rs.1,400/- as per GL
No.3756. GL No.3756 for Rs.1,400/-wasaftertheentryregarding
payment of Rs.3,00,000/- to the accused. On 11.01.1999,
Rs.3,00,000/-wasnotavailableintheaccountofPushpamangalath
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Financiers and Chitty Fund, so as to advance that amount to the
accused.Moreover,ifRs.3,00,000/-was advancedtotheaccused,
there cannot be balance amount of Rs.1,57,416/-. So, the entry
regarding Rs.3,00,000/- advanced to the accused will not in any
way tally with the amounts shown in Ext.D6. Moreover, if
Rs.3,00,000/-wasadvancedtotheaccusedfromPushpamangalath
Financiers and Chitty Fund, normally the cheque also might have
beenissuedinthenameofPushpamangalathFinanciersandChitty
Fund andnotinthepersonalnameofitsproprietor.Allthesefacts
and circumstances will point to the fact that Rs.3,00,000/- was
never advanced by the complainant to the accused.
10. DW5-the accused would say that, his cheques bearing
numberssubsequenttothatofExt.P1chequewereallpresentedin
hisbankaccount,priorto06.12.1996.ThoughheproducedExt.D4
bankpassbooktosubstantiatethatfact,sincethechequenumbers
were not mentioned in the pass book, that statement cannot be
verified.Butthedefinitecaseoftheaccusedisthat,hehadissued
Ext.P1 cheque as a blank one to Smt.Ammukutty Alex, when he
auctioned the chitty and he never issued Ext.P1 cheque to
complainant on 11.01.1999. The trial court judgment shows that
the complaint was filed through Adv.Kallada P. Kunjumon.
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Accordingtotheaccused,Sri.KalladaP.Kunjumonisthebrotherof
Smt.AmmukuttyAlexandtheyconspiredtogetherandmisusedthe
blank cheque given by the accused, in the name of the
complainant, who was a money lender.
11. Learned counsel for the 2nd respondent/accused would
contend that, the appellant/complainant had filed OS No.143 of
1999 before Principal Sub Court, Kollam, based on the very same
cheque and that suit was dismissed with cost of the defendant.
SincethecivilcourtfoundthatExt.P1chequewasnotsupportedby
valid consideration,criminalprosecutionagainsthimunderSection
138 of the NI Act, based on the very same cheque, cannot be
sustained. In Mathew Kunju Mathew v. K. V.Kuriakose[2023
KHC 890], this Court held that when a civil court finds that the
cheque was not supported by valid consideration, the essential
ingredientunderSection138oftheNIAct,thatthechequeshould
have been issued towardsalegallyenforceabledebt,isgivenago
by, and so the judgment of thecivilcourtbecomesrelevantunder
Section 43 of the Evidence Act. Paragraphs 16 to 20 of that
judgment read thus:
" 1
6.Heretheinterestingquestioniswhetheracriminal
court is bound by the decree and judgment passed by a
competent civil court taking shelter under S.11 and S.43 of
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the Indian Evidence Act.
17. In Premshanker v. I.G. of Police (2002 KHC792:
2002(3)KLT389:AIR2002SC3372),theApexCourtheld
that when there is institution of criminal case and civil case
forsamecause,judgmentofthecivilcourtbecomesrelevant
if conditions of any of S.40to43oftheIndianEvidenceAct
are satisfied, but it cannot be said that the same would be
conclusiveexceptasprovidedinS.41oftheIndianEvidence
Act.
18. Relying on Premshanker's case cited supra, this
Court in Mohandas v. P Abdul Azeez and Others (2011 (3)
KHC 41 : 2011 (3) KLJ 142) decided a case, with similar
facts as of the case on hand. It was a cheque case under
S.138 of the NI Act, and a civil suit for recovery of money
was also filed based ontheverysamecheque.Thecivilsuit
was dismissedfindingthatthechequewasnotsupportedby
consideration. The question considered was whether the
decree of the civil court was binding on the criminal court.
While answering that question, this Court held that, finding
of the civil court, that the cheque is not supported by
consideration, would be relevant, notwithstanding the fact,
that the criminal court has passed an order of conviction
against the accused.
19.Paragraphs15to20ofMohandas'casecitedsupra
read thus:
"15.ThusaperusaloftheaboveprovisionscontainedinS.41
to 43 will give a clear perspective as to how judgments,
orders or decrees passed by a competent Court would
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become relevant in another case. If thedecreeorjudgment
in question is inter partes and if the existence of the said
judgment is not disputed by either of the two parties, the
said judgment or decree becomes all the more relevant. It
need not be stressed that the decree or judgment assumes
greater relevance and significanceifthedecreeorjudgment
sought to be relied on is in respect of the same subject
matter.
16.Inthecaseonhandadmittedlythesuitwasinrelationto
the very same cheque (Ext. P1). It is beyond controversy
that the Trial Court had passedthejudgmentinthecaseon
April 26, 1995 holding the petitioner guilty of the offence.
Nevertheless, the complainant chose to institute the suit
before the Civil CourtonAugust4,1995.Apparentlyatthat
time the appeal preferred by the petitioner was pending
beforetheSessionsCourt.TheCivilCourtdismissedthesuit
on December 5, 1997. The Sessions Court had disposed of
the criminal appeal only on June 21, 2001. However it
appears that the decree passed by the Civil Court was not
broughttothenoticeoftheSessionsCourt.Anyhowthefact
remains that the Sessions Court confirmed the order of
conviction and sentence passed by the Trial Court.
17. As mentioned earlier, the short question that falls for
consideration is whether the fateofthecriminalprosecution
shouldhangonthedecreeandjudgmentpassedbytheCivil
Court based on the very same cheque. It is trite that if the
criminal case and the civil proceeding are for the same
cause, judgment of the Civil Court would be relevant, if
conditions stipulated in S.40 to 43aresatisfied.Ithasbeen
so held by a three Judge Bench of the apex Court in Prem
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Sankar v. I.G. of Police, 2002 KHC 792 : 2002 (3) KLT 389
(SC):ILR2003(1)Ker.153:AIR2002SC3372:2002(8)
SCC 87 : 2002 CriLJ 4343 . However the Court further
cautionedthat'...thejudgment,orderordecreepassedina
previouscivilproceeding,ifrelevant,asprovidedunderS.40
and S.42 or other provisions of the Evidence Act, then in
eachcase,Courthastodecidetowhatextentitisbindingor
conclusive with regard to the matter(s) decided therein'. In
other words, the Court laid down that the issue will depend
upon facts of each case.
18. It is well settled that holder of a cheque is entitled to
institute suit for recovery of the money covered under the
said cheque, evenifhehasfiledacomplaintunderS.138of
the Negotiable Instruments Act against the drawer of the
cheque (State of Rajasthan v. K. Sundaram Cement Inds.
(SC), 1996 KHC458:1996Com.Cases433:1996(2)KLT
SN 11 : 1996 (3) SCC 87 : JT 1996 (3) SC 162 : 1996(2)
SCALE 403. Various High Courts have also repeatedly held
thatenforcementoftheliabilitythroughaCivilCourtwillnot
disentitletheaggrievedpersonfromprosecutingtheoffender
for the offence punishable under S.138 of the Act. Both
remedies may be simultaneously available and a civil suit
cannot deter the criminal cause of action.
19. It has also been held in several cases that successful
terminationofthecivillitigationcannotipsofactomeanthat
the criminal prosecution cannot be pursued. The only
safeguard the drawer of the cheque (accused) may have is
thatrealisationoftheamountbytheCivilCourtwilldefinitely
have a bearing on the Criminal Court while considering the
sentence to be imposed on him if he is found guilty. Even
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while executing the decree passed by the Civil Court the
payment, if any, made by the accused before the Criminal
Court will have to be given credit to.
20. The above being the settled position about the right of
the holder of a cheque to proceed against the drawer
simultaneouslybeforetheCivilCourtandCriminalCourt,the
other question as to what would be the impasct (sic)ofthe
finding of the Civil Court in criminal proceedings orwhether
the cheque was a valid negotiable instrument supported by
consideration or whether or not there existed a legally
enforceable debt or liability etc. has to be answered in the
backdrop of theabovesettledlegalposition.Inmyview,for
the reasons stated above, question posed for consideration
hastobeansweredintheaffirmative.Idoso.Therefore,the
order of conviction and sentence passed against the
petitioner is set aside."
20. In the case on hand, a competent civil court found
that the cheques in questionwhichwerethesubjectmatterof
the criminal proceedings under S.138 of the NI Act were not
supported by validconsideration.Thatjudgmentwasdelivered
even after taking into account the conviction of the revision
petitioner under S.138 of the NI Act and the judgment of the
civil court has become final also. Since those cheques were
found to benotsupportedbyvalidconsideration,theessential
ingredient ofS.138oftheNIAct,thatthechequeshouldhave
been issued towards a legally enforceable debt, is given a go
by, and so the judgment of the civil court becomes relevant
underS.43oftheIndianEvidenceActandhencetheconviction
andthesentencepassedbythecourtsbelowcannotsustainin
the eye of law."
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12. In the present case also, a competent civil court found
that the cheque in question, which was the subject matter of the
criminal proceedings under Section 138 of the NI Act, was not
supported by valid consideration. That judgment was delivered,
even after taking intoaccountthejudgmentinCCNo.447of1999
by which, the accused wasconvictedandsentencedunderSection
138 of theNIAct.TruethatRFANo.241of2004ispendingbefore
thisCourt,challengingthejudgmentofPrincipalSubCourt,Kollam
in OS No.143 of 1999. Even otherwise, the appellant/complainant
failed to prove the nature of original transaction between himself
and the accused, and he failed to prove that he had advanced
Rs.3,00,000/-totheaccusedon11.01.1999.Thedefenceevidence
including the documents produced by him were sufficient to prick
holes in the case of the complainant, even by preponderance of
probabilities. So, the presumptions under Sections118and139of
the NI Actwillnotcometohisaid.Sincethecomplainantfailedto
prove before court that Ext.P1 cheque was issued to him by the
accused, towards discharge of a legally enforceable debt, the
impugned judgment, by which the accused was acquitted by the
appellate court, is liable to be upheld.
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13. In the result, upholding the impugned judgment of
acquittal by the appellate court, this appeal is dismissed.
Accordingly, the appeal stands dismissed.
d/-
S
SOPHY THOMAS
JUDGE
DSV/-
