Kerala High Court
Luckson Francis Augustine vs Jolly Abraham Malayil on 7 October, 2013
Author: K. Ramakrishnan
Bench: K.Ramakrishnan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN
TUESDAY, THE 23RD DAY OF SEPTEMBER 2014/1ST ASWINA, 1936
Crl.MC.No. 3773 of 2014 ()
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AGAINST THE ORDER IN Crl.Rev.Pet .
2019/2012 of HIGH COURT OF KERALA DATED 07-10-2013
IN ST 222/2012 of JUDICIAL FIRST CLASS MAGISTRATE COURT - III, KOCHI
PETITIONER(S)/ACCUSED:-:
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LUCKSON FRANCIS AUGUSTINE, AGED 35 YEARS
KALLUMADICKAL HOUSE, THURUTHY P.O., CHANGAHACHERRY
KOTTAYAM DISTRICT - 686 535
(BRITISH CITIZEN & PERMANENT RESIDENT OF 25
CHARLESTON CLOSE, SALE, MANCHESTER
CHESHIRE, M33, 4US
ENGLAND).
BY ADV. SRI.C.UNNIKRISHNAN (KOLLAM)
RESPONDENT(S)/RESPONDENTS/STATE & COMPLAINANT:-:
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1. JOLLY ABRAHAM MALAYIL,, AGED 47 YEARS
S/O.LATE JOSEPH ABRAHAM, MALAYIL HOUSE, XXIII/608
PALLURUTHY
COCHIN - 682 006 (PERMANENT RESIDENT OF P.O.BOX.122925
DUBAI, UAE).
2. STATE OF KERALA,
REPRESENTED BY PUBLIC PROSECUTOR
HIGH COURT OF KERALA, ERNAKULAM.
R1 BY ADV. SRI.K.R.SUNIL
R2 BY PUBLIC PROSECUTOR SMT.P.MAYA
THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
29.8.2014, THE COURT ON 23-09-2014 PASSED THE FOLLOWING:
Crl.MC.No. 3773 of 2014 ()
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APPENDIX
PETITIONER(S)' EXHIBITS
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ANNEXURE A1. A TRUE COPY OF THE BRITISH PASSPORT OF THE PETITIONER.
ANNEXURE A2. TRUE COPY OF THE RESOLUTION OF BOARD MEETING OF THE
COMPANY ON 05.12.2009 HELD AT UK.
ANNEXURE A3. TRUE COPY OF THE LEGAL NOTICE DATED 16.06.2010 ISSUED BY
THE ADVOCATE OF THE PETITIONER TO RESPONDENT NO.1.
ANNEXURE A4. TRUE COPY OF THE COMPLAINT DATED 21.10.2010 FILED BY THE
RESPONDENT NO.1 BEFORE THE COURT OF JUDICIAL FIRST CLASS MAGISTRATE-
II, KOCH
I.
ANNEXURE A5. TRUE COPY OF THE APPLICATION (C.M.P.NO.513/2012 IN
S.T.NO.222/2012) DATED 12.07.2012 FILED BY THE PETITIONER BEFORE THE
COURT OF JUDICIAL FIRST CLASS MAGISTRATE - III, KOCHI.
ANNEXURE A6. TRUE COPY OF THE OBJECTION DATED 01.08.2012 FILED BY
RESPONDENT NO.1 BEFORE COURT OF JUDICIAL FIRST CLASS MAGISTRATE - III,
KOCHI.
ANNEXURE A7. TRUE COPY OF THE ORDER DATED 14.08.2012 PASSED BY THE
COURT OF JUDICIAL FIRST CLASS MAGISTRATE - III, KOCHI IN
C.M.P.NO.513/2012 IN S.T.NO.222/2012.
ANNEXURE A8. TRUE COPY OF THE ORDER DATED 07.10.2014 IN
CRL.R.P.NO.2019/2012 OF THIS HON'BOE COURT.
ANNEXURE A9. TRUE COPY OF THE CERTIFICATE OF INCORPORATION,
MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF DUNE TELE
LTD., UK.
ANNEXURE A10. TRUE COPY OF THE LETTER DATED 21.03.2013 ISSUED BY THE
WARWICKSHIRE POLICE.
ANNEXURE A11. TRUE COPY OF THE LETTER DATED ISSUED BY THE CROWN
PROSECUTION SERVICE, UK.
ANNEXURE A12. TRUE COPY OF THE COMPLAINT DATED 05.01.2012 PREFERRED
BY THE RESPONDENT NO.1 TO THE SUPERINTENDENT OF POLICE, KOTTAYAM.
RESPONDENT(S)' EXHIBITS: NIL.
//TRUE COPY//
P.A. TO JUDGE.
dlk
K. Ramakrishnan, J.
==============================
Crl.M.C.No.3773 of 2014
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Dated this, the 23rd day of September, 2014.
O R D E R
Accused in S.T.No.222/12 on the file of the Judicial First Class Magistrate Court-III, Kochi has filed this application for quashing the proceedings under Section 482 of Code of Criminal Procedure.
2. It is alleged in the petition that petitioner has been arrayed as accused in S.T.No.222/12 pending before the Judicial First Class Magistrate Court-III, Kochi which was taken on file on the basis of a private complaint filed by the first respondent alleging offence under Section 138 of the Negotiable Instruments Act. Petitioner is a British citizen and is permanently residing in England since 2002. The respondent complainant has met the petitioner in Manchester, United Kingdom in September 2008 introduced by his relative Mr.Manoj Devasia, another British citizen who mooted a business in Telecom. All the three decided to form a company by name Dune Tele Ltd. with equal share holdings. The respondent complainant was the CEO & Director and 1/3rd share holder in the company with company business visa in Crl.M.C.No.3773 of 2014 : 2 : United Kingdom. He was running the business in United Kingdom with other two directors since September 2008 till the business stopped trading and liquidated on 10th October, 2010. Dune Tele Ltd till today had unrecovered loss from the supplier over 500,000 pounds (INR 5 crores). The respondent complainant is also a NRI business man (permanent resident of Dubai for last 20 years and Dubai Resident permit holder having businesses in the Gulf and Canada and Dune Tele Ltd and entire transactions between them admittedly took place in United Kingdom). According to the petitioner, there was no enforceable debt subsisting between the petitioner and the respondent and the cheque was not issued in discharge of any legally enforceable debt. Petitioner issued cheque for Rs.43,16,851/- dated 20.03.2010 drawn on ICICI Bank Ltd., Changanacherry Branch to the first respondent in the capacity of CEO of Dune Tele Ltd. The cheque was issued with a signed agreement of all the three Directors to make settlement to U.K customers if there is any liability in future and this incident happened in Manchester U.K on 5.12.2009. The complainant failed to discharge the duties of the business concern as directed by the petitioner. He along Crl.M.C.No.3773 of 2014 : 3 : with other Director manipulated company Director's withdrawal accounts and there arose disputes between the Directors. No settlement also effected with creditors. Moreover, private settlement of creditors is called Preferential Payment which is a Criminal offence in England. The U.K Solicitor adviced not to make any settlement payments to any customers as Preferential Payment is a Criminal offence according to Ltd Companies Law in England when the Company was under loss. Due to the dispute between the Directors and on the advice from the company's solicitor Mr.Roger Rubin, petitioner informed the respondent not to submit the cheque issued by the petitioner and stopped payment by him and this was done in March, 2010. Lawyer notice was sent to the complainant to return the cheque as there was no legally enforceable debt. No reply was sent by the complainant before presenting the cheque for collection. The lawyer notice to the accused was sent in an incorrect address in Kerala knowing that petitioner is a permanent resident of England and he knew the permanent address and email address of the respondent. In spite of that, he sent a notice to his Kerala address knowing that it will not be served on him. So, there is no proper service of notice as Crl.M.C.No.3773 of 2014 : 4 : contemplated under the Act issued. Further, the Company in England was wound up after getting report from the Scotland Yard Police and Warwickshire Police together with Crown prosecution service report that there is no misappropriation or defalcation by Directors of the Dune Tele.Ltd. and the company was wound up and dissolved in January 2014 as per law in England. So, the court at Kochi has no jurisdiction to entertain the complaint and no offence under Section 138 of Negotiable Instruments Act is attracted. The respondent filed false complaint before the Superintendent of Police, Kottayam on 05.01.2012 and after enquiry, the Superintendent of Police was convinced that it was a false claim. Thereafter, he filed the present complaint namely Annexure A4. There is no sufficient ingredients made out to attract the offence and proceeding of the case will amount to abuse of process of court. So, the petitioner has no other remedy except to approach this court seeking the following relief:
"To quash the Annexure A4 complaint in ST 222/12 on the files of the Court of Judicial First Class Magistrate - III, Kochi."
3. Heard the Counsel for the petitioner and the first respondent and the learned Public Prosecutor appearing for the Crl.M.C.No.3773 of 2014 : 5 : second respondent.
4. The Counsel for the petitioner submitted that admittedly the entire transaction had taken place in Manchester, United Kingdom and in fact, Annexure A2 agreement will go to show that unless the amounts are paid in the CEO's account on or before 20.03.2010, there is no need to honour the cheque and further, he had issued Annexure A3 notice to the first respondent not to present the cheque and he did not send reply and in spite of that, he filed Annexure A4 complaint. Further, there is nothing mentioned in the complaint that the amount was paid as agreed by the respondent to creditors and thereby, there was a liability on the petitioner to return the amount in respect of which the disputed cheque was issued. So, in the absence of such pleading, the complaint itself is not maintainable. Further, there was no proper notice as well. So, according to him, the complaint does not disclose the offence and the same is liable to be quashed.
5. On the other hand, the Counsel for the first respondent submitted that necessary pleadings required for filing the complaint under Section 138 of the Negotiable Crl.M.C.No.3773 of 2014 : 6 : Instruments Act has been made out in the complaint. It is specifically mentioned that the accused had issued the disputed cheque in discharge of his liability and the cheque was dishonoured for insufficient funds. Further, as the law stood on that day, Kochi court has got jurisdiction to entertain the complaint which is clear from Annexure A8 Order in Crl.R.P.No.2019/2012 of this court filed by the petitioner challenging the jurisdiction of the court. Further, all other matters are matters for evidence and if a matter has to be decided on evidence, the same cannot be quashed at the initial stage invoking the power under Section 482 of Code of Criminal Procedure.
6. Heard the Public Prosecutor as well.
7. It is an admitted fact that there was a company floated by the petitioner along with first respondent and another Director in Manchester, U.K by name Dune Tele Ltd. It is also an admitted fact that the business could not flourish as expected and there were amounts payable to the customers and in respect of which, Annexure A1 decision was taken by the Board of Directors of the said Company. It is also in a way admitted that Annexure A2 cheque dated 20.03.2010 was Crl.M.C.No.3773 of 2014 : 7 : issued by the petitioner in favour of the first respondent towards his share of liability to be discharged to the creditors as agreed between the Directors of the Company. But, the case of the petitioner was that the first respondent did not pay the amount, but it was given as a security for the petitioner to deposit the amount in the company account and not in discharge of any legally enforceable debt and according to the petitioner, he had issued Annexure A3 notice informing that the cheque was not issued in discharge of any legally enforceable debt and not supported by consideration and not to present the cheque and return the same and it was received by the first respondent and it was thereafter that he had presented the cheque and filed Annexure A4 complaint and according to the petitioner, even in the complaint, there is noting mentioned that the amount was legally due from the accused namely the petitioner and the cheque was issued in discharge of that liability. He had relied on the decisions reported in Joy Vs. State of Kerala [2010 (4) KLT 67], Central Bank of India Vs. M/s. Asian Global Ltd. [2010 (3) KLT Suppl. 35 (SC)], Linda John Abraham Vs. Business India Group Co. [2011 (4) KLT 787], Crl.M.C.No.3773 of 2014 : 8 : Mymoonath Beevi Vs. State of Kerala [2005 (4) KLT 174], Koya Moideen Vs. Hariharan [1996 (1) KLT 389] for the proposition that there must be pleading in the complaint regarding the existence of liability and the liability of the person against whom complaint is filed to pay the amount and the role played by him and if such an allegation is not there in the complaint, then, the complaint is not maintainable under Section 138 of the Negotiable Instruments Act. Most of the cases relied on by the Counsel for the petitioner are in respect of complaints filed against Directors of a company or partner of a firm without making any allegations against them as required under Section 141 of the Negotiable Instruments Act regarding their role in the day to day administration of the company or firm. But, that was not the case here.
8. He had relied on the decisions reported in John K. Abraham Vs. Simon C. Abraham [2014 (1) KLT 90 (SC)] for the proposition that in order to draw the presumption under Section 139 and 118, the burden is heavy on the complainant to show that he had the required fund for advancing the money to the accused and that the issuance of the cheque in support of the said advancement was true and the accused Crl.M.C.No.3773 of 2014 : 9 : was bound to make the payment as he had agreed. He had relied on the decision reported in Aparna A. Shah Vs. Sheth Developers Pvt.Ltd. [2013 (3) KLT 190 (SC)] for the proposition that only the drawer of the cheque who issued the cheque alone can be prosecuted under Section 138 of the Negotiable Instruments Act. That was a case where a cheque was issued from the joint account and only one of the account holder had signed the cheque and the case against the other account holder who had not signed the cheque was also made a party to the complaint and while considering the case, the Honourable Supreme Court has held that the complaint as against the person who has not signed the cheque will not be maintainable under Section 138 of the Negotiable Instruments Act and the dictum in that case is not applicable to the facts of this case.
9. The decisions reported in Krishna Janardhan Bhat Vs. Dattatraya Hegde [2008 (1) KLT 425 (SC)] and Raveendranathan Nair Vs. Vijayakumar [2014 (2) KLT 157] were relied on by the Counsel for the petitioner for the proposition that existence of a legally recoverable debt is not a matter of presumption under Section 139 and it does not raise Crl.M.C.No.3773 of 2014 : 10 : the presumption in regard to the existence of a debt also and it has to be proved by the complainant and also for the proposition that if there is failure on the part of both sides to adduce evidence, the presumption under Section 118(a) of the Act will come into play is not correct and passing of consideration will have to be proved by the plaintiff as what is available under Section 118(a) is only that the Negotiable Instrument is supported by consideration which is rebuttable. There is no dispute regarding those propositions as well. There is no dispute regarding the proposition laid down in the decision reported in Gopan Vs. Tonny Varghese [2008 (1) KLT 257] and Shinu Vs. Dhanya Madhavan [2013 (4) KLT SN 19 (C.No.16)] as well.
10. The learned Counsel for the petitioner also relied on the decision reported in Harshendra Kumar Vs. Rebatilata Koley [2011 (1) KLT 732 (SC)] for the proposition that in appropriate cases, if on the basis of the documents which are beyond the suspicion or doubt placed by accused if the acquisition against him cannot stand, then, High Court can quash the complaint as against him. That was the case where at the time when the liability arose in respect of the company, Crl.M.C.No.3773 of 2014 : 11 : the accused in that case was not a Director and he resigned the Directorship and that was accepted by the company and it was informed to the Registrar of Companies and that fact was not in dispute as well. So, in such circumstances, on the basis of the documents produced by that accused before this court, this court has held that since the documents produced are un disputed in character and admitted by other side, then, the complaint against that petitioner will not be maintainable and proceeding with the case will only amount to abuse of process of court and the complaint is liable to be quashed as against him.
11. In this case, it will be seen from Annexure A2 Minutes produced by the petitioner himself that there was an understanding between the parties regarding payment of amounts due to customers and the liability of each Director was quantified and it was also agreed that the other two Directors will issue the cheques towards their share in favour of the present petitioner who has agreed to discharge the liability. Further, the fact that the cheque was issued was also not in dispute. In para 4 of the complaint, it was specifically mentioned that for discharge of the above debt, accused Crl.M.C.No.3773 of 2014 : 12 : issued a cheque dated 20.03.2010 drawn on ICICI Bank, Changanacherry Branch for an amount of Rs.43,16,851/- in favour of the complainant and the cheque was presented and dishonoured and the notice issued. But, it was returned by the accused with endorsement 'addressee at Thuruthy Post left India.' It is also mentioned in the complaint that in spite of intimations given, accused deliberately evaded notice and managed to return the same.
12. In order to attract an offence under Section 138 of the Negotiable Instruments Act, the complainant need only allege that the cheque was issued in discharge of a legally enforceable debt wholly or in part and the cheque when presented was dishonoured for reason 'funds insufficient and arrangements not made' and in spite of notice issued, he had not paid the amount and thereby, he had committed the offence punishable under Section 138 of the Negotiable Instruments Act. It is not necessary for the complainant to allege in the complaint as to the transaction prior to the issuance of the cheque which lead to the issuance of the cheque as it is a matter for evidence. Further, the matter as to the existence of debt, issuance of cheque in discharge of Crl.M.C.No.3773 of 2014 : 13 : that liability and the issuance of notice and the return of notice by the accused was either willful or deliberate and it was manipulated by him etc., are also matter for evidence.
13. Further, in the decision reported in Pulsive Technologies P.Ltd Vs. State of Gujarat & Ors [2014 (9) SCALE 437], the Honourable Supreme Court has held that the cheque was dishonoured for the reason ''stop payment'' instructions issued to the bank and even in such cases, the offence under Section 138 of the Act is attracted and complaint cannot be quashed on this ground. However, if the accused shows that stop payment notice has been issued because of valid cause, then, offence under Section 138 of the Negotiable Instruments Act could not be made out, that is also is a matter for evidence. In this case, it is true that Annexure A3 notice was issued by the petitioner, but it was only mentioned that the cheque was not supported by consideration and he had failed to discharge duties of the business concern as directed by the petitioner. But, this is also is a matter for evidence. So, under the circumstances, if a case has to be decided on the basis of evidence and it cannot be decided solely on the basis of the documents produced, genuineness which has been not Crl.M.C.No.3773 of 2014 : 14 : fully admitted by the first respondent, then, the complaint cannot be quashed invoking the power under Section 482 of Code of Criminal Procedure. Most of the allegations made by the petitioner in the petition are matter for evidence and it is for the court to consider those aspects so as to come to a conclusion as to whether the cheque was issued in discharge of any legally enforceable debt or it was not issued as claimed by the complainant and take an independent decision on the basis of evidence and in such cases, it is not proper for this court to invoke the power under Section 482 of Code of Criminal Procedure to quash the proceedings at this stage. So, the petitioner is not entitled to get the relief of quashing the proceedings and the petition is liable to the dismissed. I do so.
In the result, the petition is dismissed. Communicate this order to the court below immediately.
Sd/-
K.Ramakrishnan, Judge.
Bb [True copy] P.A to Judge