Kerala High Court
Joys K vs Thomas Sebastian on 18 September, 2025
1
Crl. Appeal No. 1563/2007 2025:KER:69520
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE JOHNSON JOHN
THURSDAY, THE 18TH DAY OF SEPTEMBER 2025 / 27TH BHADRA, 1947
CRL.A NO. 1563 OF 2007
JUDGMENT DATED 04.07.2007 IN CC NO.246 OF 2003 OF JUDICIAL
MAGISTRATE OF FIRST CLASS -I, HOSDRUG
APPELLANT/COMPALINANT:
JOYS K., S/O. VARKEY, KOCHUMURIYIL HOUSE, KOLICHAL, PANATHADY
VILLAGE AND POST, HOSDURG TALUK.
BY ADVS.
SHRI.SALIM KUMAR A.
SHRI.AKHIL J.K.
RESPONDENTS/ACCUSED & STATE:
1 THOMAS SEBASTIAN, PROPRIETOR,
KANHIRATHUMKAL OIL AND FLOUR MILLS, P.O.CHERUPUZHA,
KANHIRATHINKAL HOUSE, KAKKAYANCHAL, VIA PAYYANNUR,
TALIPARAMBA TALUK, KANNUR DISTRICT.
2 STATE OF KERALA REPRESENTED BY
PUBLIC PROSECUTOR, HIGH COURT OF KERALA.
BY ADVS.
R2 BY SRI. ALEX M. THOMBRA, SR. PUBLIC PROSECUTOR
SRI.C.P.PEETHAMBARAN
THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 16.09.2025,
THE COURT ON 18.09.2025 DELIVERED THE FOLLOWING:
2
Crl. Appeal No. 1563/2007 2025:KER:69520
'C.R'
JOHNSON JOHN, J.
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Crl. Appeal No. 1563 of 2007
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Dated this the 18th day of September, 2025
JUDGMENT
This appeal by the complainant is against the acquittal of the
accused for the offence under Section 420 IPC.
2. As per the complaint, on 07.01.2002, the accused approached
the complainant at his residence and asked to lend him a sum of
Rs.90,000/- for his urgent necessity and as such, the accused received
Rs.90,000/- from the complainant and issued a cheque dated
08.01.2002 for Rs. 90,000/-. It is alleged that while issuing the said
cheque, the accused dishonestly induced the complainant to believe that
the amount is borrowed for the business in connection with the mill and
that the cheque is issued by him as the proprietor of the mill. It is stated
that believing the version of the accused, the complainant accepted the
cheque and subsequently, when he presented the cheque for collection,
the same was dishonoured for the reason 'funds insufficient and account
is individual and not in favour of the firm'.
Crl. Appeal No. 1563/2007 2025:KER:69520
3. Thereafter, the complainant issued notice dated 28.01.2002 to
the accused and in spite of receipt of notice, the accused failed to pay
the cheque amount to the complainant. It is further alleged in the
complaint that the accused issued the cheque with the knowledge that
the cheque was not drawn on an account maintained by the firm and he
made the complainant to believe that the cheque is that of the firm
Kanhirathinkal Oil and Flour Mills with the deliberate intention of
cheating the complainant.
4. Before the trial court, PWs 1 to 4 were examined and Exhibits
P1 to P7 were marked from the side of the complainant and from the
side of the accused, DW1 examined.
5. After considering the oral and documentary evidence on record
and hearing both sides, the trial court found that the complainant has
not succeeded in proving any dishonest inducement at the initial stage of
the transaction and that the complainant has not succeeded in proving
the offence under Section 420 IPC against the accused and hence, the
accused was acquitted.
6. Heard Sri. Salim Kumar, the learned counsel for the appellant,
Sri. C.P. Peethambaran, the learned counsel for the accused/first
Crl. Appeal No. 1563/2007 2025:KER:69520
respondent and Sri. Alex M. Thombra, the learned Senior Public
Prosecutor appearing for the second respondent.
7. The learned counsel for the appellant argued that at the time of
borrowing the amount, the accused misrepresented that he is the
proprietor of Kanhirathinkal Oil and Flour Mills and that the cheque is
issued in his capacity as the proprietor of the said mill and therefore,
from the evidence of PWs 1 to 4, the trial court ought to have found that
the accused had the intention of cheating the complainant from the very
beginning and that the complainant has proved all the ingredients of
Section 420 IPC against the accused.
8. The learned counsel for the accused/1 st respondent argued
that the averments in the complaint and Exhibit P5, copy of the lawyer
notice dated 28.01.2002, would clearly show that the alleged payment of
money by the complainant to the accused prior to the issuance of the
cheque was not on the basis of the alleged inducement that the cheque
is drawn on an account in the name of the firm Kanhirathinkal Oil and
Flour Mills.
Crl. Appeal No. 1563/2007 2025:KER:69520
9. In this connection, it is pertinent to note that in paragraph 2 of
the complaint, it is stated as follows:
"On 07.01.2002 the accused approached the complainant at his residence at
Kolichal at about 3 PM and asked to lend him a sum of Rs.90,000/- for his urgent
necessity. As such the accused received the sum of Rs.90,000/- from the
complainant in the presence of witnesses and for discharging the said liablity the
accused issued a cheque dated 8.1.2002 for Rs.90,000/- (Rupees ninty thousand
only) bearing number 540693 drawn on the North Malabar Gramin Bank,
Padiyotchal Branch in favour of the complainant."
10. In paragraph 3 of the complaint, it is stated as follows:
"It is submitted that the accused has issued the cheque knowingly that the
aforesaid cheque was not drawn to the firm and thereby he dishonestly made
believe the complainant that the cheque is belonged to his firm called
"Kanhirathinkal Oil & Four Mills', P.O. Cherupuzha; and knowing further that
the cheque is belonged to his personal account and there was no sufficient fund
in his account with the bank to honour the requirements of the cheque."
11. The complainant when examined as PW1 deposed that the
accused is known to him for the last 15 years and that the accused
borrowed Rs.90,000/- from him on 07.01.2002 for his urgent necessity.
According to PW1, the accused informed him that he brought a cheque
belonging to the account of the mill and that the amount can be
withdrawn from the Bank on 08.01.2002.
12. Exhibit P3, cheque dishonour memo, shows that the cheque
was dishonoured for two reasons: (i) funds insufficient; and (ii) account
Crl. Appeal No. 1563/2007 2025:KER:69520
is individual not in favour of the firm. PWs 2 and 3 are the witnesses
examined by the complainant to prove the transaction. The evidence of
PWs 2 and 3 shows that they were present when the accused borrowed
Rs.90,000/- from the complainant and issued Exhibit P1 cheque. The
evidence of PWs 2 and 3 in chief examination itself shows that only from
the complainant, they came to know that the accused cheated the
complainant.
13. PW4 is the General Manager of the District Industrial Centre,
Kannur. Even though PW4 is examined to prove the name and identity of
the proprietor of Kanhirathinkal Oil and Flour Mills, his evidence in this
regard is vague to the core. PW4 stated that in the application seeking
registration of the firm Kanhirathinkal Oil and Flour Mills, the name of
the proprietor is shown as Dolesey Sebastian. According to PW4, Exhibit
P7 is the true extract of the permit issued and as per Exhibit P7, the firm
is in the name of Adey Sebastian for the period from 29.11.1999 to
2.12.2004. He would say that the firm was transferred in favour of one
Joby Joseph on 15.03.2005 and prior to the said period, the firm was in
the name of Lucy Sebastian. In spite of the serious contradiction in the
Crl. Appeal No. 1563/2007 2025:KER:69520
evidence of PW4 regarding the name of the proprietor of the firm, no
attempt is seen made by the respective counsel who appeared for the
complainant and the accused before the trial court to clarify the position
and therefore, I find that the evidence of PW4 cannot be relied upon to
arrive at a conclusion regarding the identity of the proprietor of the firm
Kanhirathinkal Oil and Flour Mills during the relevant period.
14. It is well settled that the ingredients to be established for a
conviction under Section 420 IPC and Section 138 of the Negotiable
Instruments Act, 1881 are fundamentally different. The offence of
cheating under Section 420 IPC arises only when the accused
dishonestly induces the complainant to deliver any property and
therefore, the intention to deceive from the very beginning is the gist of
the offence of cheating and a mere failure to keep a promise
subsequently cannot give rise to a criminal prosecution for cheating. The
difference between a mere breach of contract and the offence of
cheating depends upon the intention of the accused at the time of the
alleged incident.
15. In Prof. Vijayasarathy v. Sudha Seetharam [2019 (1) KLT
OnLine 3038 (SC), the Honourable Supreme Court has culled out the
ingredients to constitute the offence under Sections 415 and 420 IPC as
under:
Crl. Appeal No. 1563/2007 2025:KER:69520
"14. Section 415 of the Penal Code reads thus:
"Section 415. Cheating.- Whoever, by deceiving any
person, fraudulently or dishonestly induces the person so
deceived to deliver any property to any person, or to consent
that any person shall retain any property, or intentionally
induces the person so deceived to do or omit to do anything
which he would not do or omit if he were not so deceived,
and which act or omission causes or is likely to cause
damage or harm to that person in body, mind, reputation or
property, is said to "cheat"."
The ingredients to constitute an offence of cheating are as follows:
i) there should be fraudulent or dishonest inducement of a
person by deceiving him;
ii) (a) the person so induced should be intentionally induced
to deliver any property to any person or to consent that any
person shall retain any property, or
(b) the person so induced should be intentionally induced to
do or to omit to do anything which he would not do or omit
if he were not so deceived; and
iii) in cases covered by (ii) (b) above, the act or omission
should be one which caused or is likely to cause damage or
harm to the person induced in body, mind, reputation or
property.
A fraudulent or dishonest inducement is an essential ingredient of the
offence. A person who dishonestly induces another person to deliver any
property is liable for the offence of cheating.
15. Section 420 of the Penal Code reads thus:
"Section 420. Cheating and dishonestly inducing deliver of property.-
Whoever cheats and thereby dishonestly induces the person deceived to
deliver any property to any person, or to make, alter or destroy the
whole or any part of a valuable security, or anything which is signed or
sealed, and which is capable to being converted into a valuable security,
shall be punished with imprisonment of either description for a term
which may extend to seven years, and shall also be liable to fine."
The ingredients to constitute an offence under Section 420 are as follows:
Crl. Appeal No. 1563/2007 2025:KER:69520
i) A person must commit the offence of cheating under
Section 415; and
ii) The person cheated must be dishonestly induced to (a)
deliver property to any person; or
(b) make, alter or destroy valuable security or anything
signed or sealed and capable of being converted into
valuable security.
Cheating is an essential ingredient for an act to constitute an offence under
Section 420."
16. In this case, the averments in the complaint, the evidence of
PWs 1 to 3 and Exhibit P5 notice would clearly show that the case of the
complainant is that the accused issued the cheque in discharge of the
debt and in the absence of any specific allegation or evidence to show
that the accused induced the complainant to advance the loan because
of the misrepresentation in connection with the firm or the cheque, it
cannot be held that the complainant has succeeded in proving the
ingredients of the offence under Section 420 IPC as against the accused.
17. The learned counsel for the first respondent/accused also
argued that the appellate court cannot reverse a judgment of acquittal
only because another view is possible. In K. Prakashan v. P.K.
Surendran [(2008) 1 SCC 258], the Honourable Supreme Court held
that it is now trite that if two views are possible, the appellate court shall
not reverse a judgment of acquittal only because another view is
possible to be taken. In Sunil Kumar Sambhudayal Gupta (Dr.) v. State of
Maharashtra [(2010) 13 SCC 657], it is held thus:
Crl. Appeal No. 1563/2007 2025:KER:69520
"39. Every accused is presumed to be innocent unless his guilt is
proved. The presumption of innocence is a human right. Subject to the
statutory exceptions, the said principle forms the basis of criminal
jurisprudence in India. The nature of the offence, its seriousness and
gravity has to be taken into consideration. The appellate court should bear
in mind the presumption of innocence of the accused, and further, that the
trial court's acquittal bolsters the presumption of his innocence.
Interference with the decision of the trial court in a casual or cavalier
manner where the other view is possible should be avoided, unless there
are good reasons for such interference."
18. On a careful re-appreciation of the entire evidence on record,
I find no reason to disagree with the finding of the trial court that the
complainant has not succeeded in establishing any fraudulent or
dishonest intention on the part of the accused at the time of borrowing
the money and the allegations in connection with the subsequent
issuance of the cheque and its dishonour are not sufficient to establish
the ingredients of the offence under Section 420 IPC against the accused
and therefore, I find that this appeal is liable to be dismissed.
In the result, this appeal is dismissed.
sd/-
JOHNSON JOHN,
JUDGE.
Rv
