Kerala High Court
C.P.M.Trading Company (P) Ltd vs State Of Kerala on 21 March, 2025
Crl.Appeal No.1931 of 2007
1
2025:KER:23952
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MRS. JUSTICE C.S. SUDHA
FRIDAY, THE 21ST DAY OF MARCH 2025 / 30TH PHALGUNA, 1946
CRL.A NO. 1931 OF 2007
AGAINST THE ORDER DATED 08/08/2006 IN CC NO.356 OF
2005 ON THE FILE OF THE JUDICIAL MAGISTRATE OF FIRST
CLASS ,KOTTAYAM.
APPELLANT/COMPLAINANT:
C.P.M.TRADING COMPANY (P) LTD.
XIII/127, M.C.ROAD, PULIMOOD JUNCTION,
KOTTAYAM REPRESENTED BY ITS POWER OF ATTORNEY,
HOLDER, K.N.MURALIDHARAN NAIR,
LALITHA NIVAS, T.P.PURAM P.O., VAZHOOR.
BY ADV SRI.PHILIP T.VARGHESE
RESPONDENTS/STATE AND ACCUSED:
1 STATE OF KERALA
PUBLIC PROSECUTOR,
HIGH COURT OF KERALA, ERNAKULAM.
2 HARIKRISHNAN,
KARUNA NEAR CHALAD TEMPLE, KANNUR.
SRI.VIPIN NARAYAN, PUBLIC PROSECUTOR.
BY ADV V.RAMKUMAR NAMBIAR
THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON
18.03.2025, THE COURT ON 21/03/2025 DELIVERED THE
FOLLOWING:
Crl.Appeal No.1931 of 2007
2
2025:KER:23952
C.S.SUDHA, J.
---------------------------------------------
Crl.Appeal No.1931 of 2007
---------------------------------------------
Dated this the 21st day of March 2025
JUDGMENT
This is an appeal under Section 378(4) Cr.P.C. filed by
the complainant against the judgment dated 08/08/2006 in
C.C.No.356/2005 on the file of the Judicial First Class Magistrate
Court-I, Kottayam, aggrieved by the acquittal of the accused
under Section 255(1) Cr.P.C. of the offence punishable under
Section 138 of the Negotiable Instruments Act, 1881 (the N.I.
Act)
2. The case of the complainant is as follows - the
complainant is a Private Limited Company registered under the
Companies Act and is engaged in manufacturing business at
Kottayam. Shibu P. Mathew, the Managing Director, in charge of
the day to day business activities of the Company has nominated,
constituted and appointed K.N.Muraleedharan Nair as the power
2025:KER:23952
of attorney holder to institute and prosecute the complaint for and
on behalf of the Company. Ext.P2 (Ext.P10) agreement dated
14/11/2001 was entered into between the complainant Company
and the accused as per which the latter was made the
representative of the Company. An amount of ₹94,272/- was due
to the complainant from the accused out of the business
transactions in respect of the aforesaid agreement. In discharge of
the said amount, Ext.P3 cheque dated 07/11/2003 drawn on the
Punjab National Bank, Kannur Branch was issued by the accused
in favour of the complainant. When the complainant presented
the cheque for collection and encashment through the State Bank
of Tranvancore, Kottayam Branch, the cheque was dishonoured
as per Exts.P4 and P5 memos dated 12/11/2003 and 21/11/2003
respectively. The cheque was dishonoured for the reason that the
account had been closed. Pursuant to the same, the complainant
caused to issue Ext.P6 notice dated 28/11/2003 to the accused
calling upon him to repay the cheque amount within a period of
15 days from the date of receipt of the notice. The accused
2025:KER:23952
received the notice on 01/12/2003, which is evident from Ext.P8
acknowledgment card. However, he sent a reply notice raising
false and frivolous contentions. Hence, the complaint.
3. The trial court on the basis of the sworn
statement of the complainant, took cognizance of the offence
under Section 138 of the N.I. Act and summons was issued to the
accused. When the accused appeared on receipt of summons, he
was enlarged on bail. He was also furnished with copies of all the
relevant records. The particulars of the offence was read over and
explained to the accused, to which he pleaded not guilty.
4. The complainant examined himself as PW1 and
Exts.P1 to P15 were marked on his side. After closing the
evidence of the complainant, the accused was duly questioned
under Section 313(1)(b) Cr.P.C. He denied the entire allegations
and maintained his innocence. He submitted that when he had
entered into Ext.P2 (Ext.P10) agreement with the complainant, he
had entrusted two blank signed cheque leafs to the complainant as
guarantee. Ext.P3 is one of the cheques thus entrusted to the
2025:KER:23952
complainant. On 22/09/2003, he had issued Ext.D1 notice to the
complainant asking the complainant not to present the cheque
before the bank. Thereafter he filed Ext.D3 suit on 10/11/2003
before the Munsiff Court, Kannur, inter alia seeking a decree of
mandatory injunction directing the complainant to return the
cheque leafs given to the Company. The accused examined
himself as DW1 and Exts.D1 to D6 were marked on his side.
5. The trial court on a consideration of the oral and
documentary evidence and after hearing both sides, found the
accused not guilty of the offence punishable under Section 138 of
the N.I. Act and hence acquitted the accused under Section 255(1)
Cr.P.C. Aggrieved, the complainant has come up in appeal.
6. The only point that arises for consideration in
this appeal is whether the finding of acquittal of the accused by
the trial court requires any interference by this Court.
7. Heard both sides.
8. It was submitted by the learned counsel for the
appellant/complainant that the signature in Ext.P3 cheque is
2025:KER:23952
admitted by the accused. The fact that the cheque was issued
from the account of the accused is also admitted. Therefore the
issuance and execution of the cheque is proved by the
complainant and hence the presumptions contained in Section 118
and Section 139 of the N.I. Act are attracted. The presumptions
have not been rebutted by the accused. Hence, the trial court
went wrong in acquitting the accused and therefore the impugned
judgment requires to be reversed, goes the argument.
9. Per contra, it was submitted by the learned
counsel for the respondent/accused that only if the complainant
proves that a cheque had been issued in discharge of a debt, the
presumptions contained under the Act would be attracted. Here
the liability has been denied by the accused. Ext.P3 cheque was
only given as a guarantee when Ext.P2 agreement was entered
into between the parties. No authority was given to the
complainant to fill up the blank cheques given at the time of
execution of Ext.P2 agreement. Therefore the blank cheques
including Ext.P3 that were issued as security are not negotiable
2025:KER:23952
instruments and therefore the presumptions under the N.I. Act
would not be attracted and hence there was no necessity to rebut
the same, goes the argument.
10. Admittedly, the complainant and the accused
entered into Ext.P2 agreement (Ext.P10) dated 14/11/2001 as per
which the complainant/accused, who was made a representative
of the complainant Company, agreed to purchase, stock, distribute
and sell products of the Company. Clause (6) of the agreement
reads thus-
"6. The REPRESENTATIVE will be given 30 days time to clear
the payments against supplies. He should clear the payments
either by cash or DD within the stipulated time and as a
guarantee, the REPRESENTATIVE should issue 2 cheques to the
former. The Company will present the cheques only if they don't
get the payments with in the stipulated time. (Ch.No.204593 And
204594 of Punjab National Bank, Kannur Branch)."
Therefore, when Ext.P3 cheque, that is, cheque no.204593 was
given, there was no liability/debt due from the accused, as two
cheques including Ext.P3 cheque was given as guarantee. After
the execution of Ext.P2 agreement, disputes seem to have arisen
2025:KER:23952
between the parties relating to the amounts due from the accused.
The accused is seen to have sent Ext.D1 notice dated 22/09/2003
in which he has stated thus -
"At the time of entering into the said business arrangement I
was made to deposit with you two blank signed cheque leaves
bearing the numbers SHB 204593, SHB 204594 of the
Panjab National Bank. This deposit was made as a formality
as stated by you. By issuing these blank cheque leaves I had
specifically mentioned that you derive no authority to fill up
and make them negotiable instruments. If you take the
issuance of the blank cheque leaves as authority to make
them the negotiable instruments I have by revoke that
authority and request that to return the same.
As per our agreement I have the book orders only.
But as per your request if any parties make any payment
directly to me I used to collect and deposit with you. For this
arrangement you had promised me a commission @ of 4.5%
for the same this collected. I have seen grantly discharging
my duties as per the terms said by you. I have by enclosing
the copies of relevant documents pertaining to said
transactions. As per the said documents I owe nothing to you
but it is you who have to pay me the promised commission.
I would like to add here that I am not the only
person who collected the amount. Your executives also
collected the amounts from the field. Of late, you have raised
2025:KER:23952
certain doubts regarding some of the collections. According
to my accounts one of your parties, M/s.Deccan Associates,
Mayyil, Kannur has to pay you only Rs.1560/- but according
to your calculation it is stated to give Rs.17000/-. In this
way you have raised some false claims. You have also sent
me as list or parties with any dealings you now want me to
collect all these monies and you have started threatening me
that in case of my failure you would get the Blank cheque
leaves filled up and foist a criminal case under negotiable
instrument act against me.
Hence I am sending you this request letter
containing the total collection and total payment. I have
made and requesting you to return the two blank cheque
leaves above stated. I further request you to send me the
detail of your account for my verification and to see whether
I have made any default and to settle the accounts."
(Emphasis supplied)
In reply to Ext.D1, the Manager of the complainant Company has
given Ext.D2 reply notice dated 14/10/2003 which reads thus -
"ഹര ക ഷൻറ ഉതരവ ദ ത ത ല ള കടകള ൽ ന ന
മ ഴ വൻ ത കയ ലഭ ച! ഹര ക ഷന മ യ ള സ മത ക
ഇടപ ട കൾ ത'ർത! കഴ ഞ! ത ങള റട Blank cheque
Nos.204593, 204594 മടക തന റക ള എന! ഇത ന ൽ ഉ പ!
തര ന . അല തപക കമന യ2! ത ങള ൽ ന ന
ലഭ ക വ ന ള മ ഴ വൻ ത കയ!ക റ3ക കൾ ബ ങ ൽ
ഹ ജര ക നത യ ര ക .."
2025:KER:23952
As per Ext.D2, the Manager is seen to have written that when the
amounts due from the shops under the responsibility of the
accused are received, the two cheques would be returned, if not
the cheques would be presented before the bank for the entire
amounts due from the accused. In Ext.D1 notice the accused
specifically denies any dues from him and also asked the
complainant Company to send their account details for
ascertaining the amount if any due from him. This has not been
done by the complainant. Ext.D2 does not specify the amount
due from the accused. It is only a vague reply. PW1 in the box
was also unable to specify the amount due from the accused in
relation to the business transactions that existed between the
parties pursuant to Ext.P2 agreement. The case of PW1 in the
box is that on 07/11/2003 the accused along with his friend came
to his office at Kottayam and the friend filled up Ext.P3 cheque
and handed it over. This is highly improbable and unlikely in the
light of Ext.D1 notice followed by Ext.D3 suit. When Ext.D1
notice was already sent by the accused saying that no amount was
2025:KER:23952
due from him, it cannot be believed that the accused thereafter
went to the office of the complainant Company and directed his
friend who had accompanied him to fill up Ext.P3 cheque and
hand it over to PW1.
11. It is true that all the statutory formalities under
the N.I.Act have been complied with by the complainant. But
unless the financial liability or debt due from the accused has
been established, the presumptions under the N.I. Act will not be
attracted. As the presumptions are not attracted, there is no
burden on the respondent/accused to disprove or rebut the same.
No grounds for interference into the impugned judgment are
made out. The appeal is liable to be dismissed and hence I do so.
Interlocutory applications, if any pending, shall stand
closed.
Sd/-
C.S.SUDHA
JUDGE
Jms
