Kerala High Court
M/S.Sree Gokulam Chit & Finance Co.Ltd vs Padmakumar S. Aged 41 Years on 8 April, 2021
Equivalent citations: AIRONLINE 2021 KER 369
Author: K.Haripal
Bench: K.Haripal
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE K.HARIPAL
THURSDAY, THE 08TH DAY OF APRIL 2021 / 18TH CHAITHRA, 1943
CRL.A.No.519 OF 2011(D)
AGAINST THE JUDGMENT DATED 19.01.2009 IN ST 2458/2007 OF JUDICIAL
MAGISTRATE OF FIRST CLASS IV (MOBILE COURT),TVM.
AGAINST THE ORDER/JUDGMENT IN Crl.L.P. 98/2011 OF HIGH COURT OF
KERALA
APPELLANT/COMPLAINANT:
M/S.SREE GOKULAM CHIT & FINANCE CO.LTD.
PVT.LTD, REP. BY ITS MANAGING DIRECTOR,
SRI.A.M.GOPALAN,
THROUGH HIS POWER OF ATTORNEY HOLDER, RENJITH C.R,
AGED 29 YEARS, S/O.CHANDRASEKHARAN NAIR, LEGAL
ASSISTANT, M/S.SREE GOKULAM CHIT AND FINANCE
CO.PVT.LTD., THIRUVANANTHAPURAM DIVISIONAL OFFICE,
IIND FLOOR, ATTUKAL SHOPPING COMPLEX, EAST FORT,
THIRUVANANTHAPURAM.
BY ADVS.
SRI.K.S.BABU
SMT.N.SUDHA
RESPONDENTS/ACCUSED & STATE:
1 PADMAKUMAR S. AGED 41 YEARS.
S/O.SIVAN CHETTIAR,
PROP.SREEKANDESWARA,
ENTERPRISES, T.C. 20/1089,
MANAS NAGAR, KARAMANA,
TRIVANDRUM PIN - 695 002.
2 STATE OF KERALA REPRESENTED BY THE
PUBLIC PROSECUTOR, HIGH COURT OF KERALA,
ERNAKULAM, PIN - 682 031.
R1 BY ADV. SRI.M.DINESH
R2 BY ADV. SR.PUBLIC PROSECUTOR, SRI. M.S.BREEZ
THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 30-03-2021,
THE COURT ON 08-04-2021 DELIVERED THE FOLLOWING:
CRL.A.No.519 OF 2011
2
JUDGMENT
The complainant in a prosecution under Section 142 of the Negotiable Instruments Act, hereinafter referred to as the Act, who suffered defeat from the trial court, has moved this Court under Section 378(4) of the Code of Criminal Procedure, hereinafter referred to as the Cr.P.C., challenging the correctness of the finding of acquittal. The complainant/appellant alleged that, in discharge of an amount of Rs.81,500/- due to the complainant, the accused/first respondent issued cheque No.021301 dated 29.03.2006 drawn on Killipalam branch of the Indian Overseas Bank. On presenting through Vellayambalam branch of the Corporation Bank, the cheque was returned dishonoured on 12.04.2006 with the endorsement "funds insufficient". Thereafter, the first respondent was alerted through a lawyer notice on 29.04.2006, demanding payment of the amount within 15 days. Though the notice was served on him, the amount was not paid and thus the complaint was instituted before the trial court on 27.05.2006.
2. Pursuant to the summons, the accused/first respondent entered appearance and pleaded not guilty to the allegation. Thereafter, the CRL.A.No.519 OF 2011 3 Assistant Legal Officer of the complainant company, who is also the power of attorney holder of the Managing Director gave evidence as PW1. Exts.P1 to P6 were also marked. When examined under Section 313(1)(b) of the Cr.P.C., the first respondent denied the incriminating materials spoken against him. To the penultimate question, he replied that the Ext.P2 was entrusted with the complainant as a blank cheque at the time of bidding the chitty; such a document was given without incorporating the amount or name of the parties. The complainant used to take passbook for verification every month. At last, after verification, the pass book was not returned to him. According to him, the documents of the complainant would reveal that no amount is due from him. Thereafter, two witnesses were examined on the side of the first respondent. The first respondent himself gave evidence as DW1 and an officer of the complainant was examined as DW2. Exts.D1 to D4 were also marked. After hearing counsel on both sides, the learned Magistrate found him not guilty of the offence punishable under Section 138 of the Act and acquitted under Section 255(1) of the Cr.P.C. According to the trial court, though the complainant company succeeded in establishing that Ext.P2 cheque was dishonoured due to insufficiency of funds and CRL.A.No.519 OF 2011 4 the complaint was laid following all the statutory formalities, there is no satisfactory evidence regarding the actual liability of the first respondent and also regarding the execution of Ext.P2 cheque by the first respondent towards a legally enforcible debt. On that premise the case ended in acquittal.
3. The appeal was preferred after obtaining special leave of this Court under Section 378(4) of the Cr.P.C.
4. I heard the learned counsel for the appellant as well as the learned counsel for the first respondent. Trial court records were also summoned and examined.
5. According to the learned counsel for the appellant, it was a chitty transaction, the sala of the chitty was Rs.1,00,000/-, the first respondent had bid the chitty and a sum of Rs.75,000/- was paid to him, the Ext.D4 ledger extract would reveal that he had paid only an amount of Rs.42,000/- which includes dividend payable; when balance amounts were due, the first respondent reached the office of the appellant and gave the Ext.P2 cheque for the balance sum of Rs.58,000/- and also the interest accrued. However, the interest portion is not shown in the Ext.D4 ledger extract. The learned counsel also invited my attention to CRL.A.No.519 OF 2011 5 the relevant portions of the Chit Funds Act and submitted that the Foreman is entitled to collect interest on the amount fallen due. The counsel also placed reliance on the decision reported in Chandel D.K v. M/s. Wockhardt Ltd. and another [ILR 2020(1)Ker.611] and also Joseph Jose v. J. Baby and others [2002 (2) KLJ 332].
6. The learned counsel for the first respondent/accused strongly defended the judgment of the trial court. According to him, the complaint as well as the notice allegedly issued at the instance of the appellant do not contain particulars of the transaction. The learned counsel reiterated that the cheque was given in a signed blank form, as a security, at the time of withdrawing the prize amount after bidding the chitty. He had already paid a substantial portion of the amount; still the cheque was presented for encashment incorporating an exorbitant amount, which is not actually due to the appellant.
7. It is the common case that the appellant had conducted a chitty, which was subscribed by the first respondent. The chitty amount was Rs.1,00,000/; after making some remittance, he bid the chitty and the prize amount of Rs.75,000/- was received by him. It has also come out that the first respondent was given a passbook for making periodical CRL.A.No.519 OF 2011 6 entries of remittances.
8. Basing on Ext.D4 ledger extract, the learned counsel for the appellant submitted that the first respondent had paid only an amount of Rs.42,000/-, that the principal amount of Rs.58,000/- is due to the appellant; that along with interest is also payable by him; when the fact was apprised to the first respondent, he gave the Ext.P2 cheque, which, on presentation was dishonoured due to insufficiency of funds and that gave rise to the cause of action for initiating the prosecution case.
9. As noticed earlier, the fact that the first respondent was a subscriber to the chitty and had received the bid amount of Rs.75,000/- is not in dispute. Similarly, the fact that the Ext.P2 cheque belonged to the first respondent also is beyond dispute. But according to him, it was handed over in a signed blank form and other matters were incorporated by the appellant. Thus the complaint was filed after misusing the instrument. The learned counsel for the first respondent also pointed out that, the pass book was taken back by the appellant, that receipts issued by the appellant on payment of periodical remittances are not with him, which were destroyed by him.
10. Having admitted that the Ext.P1 cheque was issued in a signed CRL.A.No.519 OF 2011 7 blank form, now the first respondent is estopped from disputing other aspects. Adding to this, it is admitted that there was a chitty transaction between the parties. Even the first respondent has no case that the entire amount was paid and he has no case of total discharge. Even though the appellant was not bound to produce the statement of accounts, as held by the Hon'ble Supreme Court in Chandel's case, quoted supra, still Ext.D4 indicates that a sum of Rs.42,000/- alone was remitted by the first respondent in the chitty transaction, in which the chitty amount was Rs.1,00,000/-. The first respondent has no case that he had remitted anything more. His contention is that the pass book was taken back by the appellant eludes comprehension. Similarly, the non production of the vouchers issued by the appellant also is a matter of adverse inference. In other words, after remitting only Rs.42,000/- towards the chitty with a sala of Rs.1,00,000/-, it is only a matter of mathematical calculation that Rs.58,000/- is due to the appellant. As rightly pointed out by the learned counsel for the appellant, Section 21(1)(c) of the Chit Funds Act 1982, enables the Foreman to claim interest and penalties, if any, payable or in default of payment of instalment and such other amounts as may be payable to him under the provisions of the Chit Funds Act. The CRL.A.No.519 OF 2011 8 appellant is the Foreman of the chitty and the first respondent is a defaulted subscriber. In the circumstances, the appellant is entitled to get back an amount of Rs.58,000/- together with interest, penalty and other incidental expenses.
11. Even though the learned Magistrate was convinced that the appellant is entitled to realise interest at 18% per annum on defaulted subscription, the complaint was dismissed on the premise that the liability of the first respondent will be much less than the amount shown in the Ext.P2 cheque. Having regard to the matters noticed above, I find it difficult to agree with the said proposition.
12. It is the settled proposition of law that once the execution of the document is admitted or proved, the complainant is entitle to draw the presumptions under Sections 118 and 139 of the Act. In the decision reported in Bir Singh v Mukesh Kumar [ AIR 2019 SC 2446]. The Hon'ble Supreme Court has held that if a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars and itself would not invalidate the cheque. Basing on the decision in Bir Singh, quoted supra, in Kalamani Tex and another v Balasubramanian P [ILR 2021(1) CRL.A.No.519 OF 2011 9 Ker.855] the Supreme Court has held that even if the argument of the accused is taken on face value that a signed blank cheque alone was given, the statutory presumption cannot be obliterated. Thus after admitting issuance of Ext.P2 cheque, and having regard to the circumstances led to the issue of the instrument, the first respondent is estopped from taking contentions as stated above.
13. Here the case of the first respondent, in my assessment, is quite weak and fragile, as he has admitted the chitty transaction. He has also no case that after getting the prize money, the entire amount was paid back. In other words, he has neither taken a plea of discharge nor attempted to make it out. His non sending a reply to the lawyer notice, non production of the pass book, vouchers etc., also have to be considered in this backdrop.
14. Much has been argued about the Ext.D2 counter foils of cheques kept by him. In my assessment, no inference can be drawn on the arguments based on Ext.P2. It can be assumed that it is a document maintained in regular course of business. Even otherwise, the other circumstances adverted to earlier give a clear upperhand to the appellant. He has proved execution of Ext.P2 cheque and thus is entitled CRL.A.No.519 OF 2011 10 to draw the presumptions under Sections 118 and 139 of the Act. The first respondent could not rebut the presumptions. The learned Magistrate has failed to consider these relevant aspects on its proper perspective. The judgment is liable to be interfered with.
15. In the result, the finding that the first respondent has not committed the offence is liable to be reversed. He is found guilty of offence punishable under Section 138 of the Act, convicted and sentenced to pay a fine of Rs.81,500/-(Rupees Eighty one thousand five hundred only) which shall be paid as compensation to the appellant. If the amount is not paid within three months from today, the first respondent shall suffer simple imprisonment for two months.
Appeal allowed as above.
Sd/-
K.HARIPAL
JUDGE
Jms/31.03
//True Copy// P.A to Judge