Kerala High Court
Concord Leasing & Hire Purchase Pvt vs P.Bhargavan on 27 July, 2009
Author: S.S.Satheesachandran
Bench: S.S.Satheesachandran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
CRL.A.No. 183 of 2002(A)
1. CONCORD LEASING & HIRE PURCHASE PVT.
... Petitioner
Vs
1. P.BHARGAVAN, S/O. NARENDRAN,
... Respondent
2. THE STATE OF KERALA,
For Petitioner :SRI.JACOB ABRAHAM
For Respondent :PUBLIC PROSECUTOR
The Hon'ble MR. Justice S.S.SATHEESACHANDRAN
Dated :27/07/2009
O R D E R
S.S. SATHEESACHANDRAN, J.
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Crl.A.No.183 of 2002
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Dated: 27th July, 2009
JUDGMENT
Complainant is the appellant. The appeal is filed challenging the order of acquittal rendered in favour of the first respondent(accused) by the Sessions Judge, Kozhikode reversing the conviction and sentence imposed against him by the trial magistrate for the offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the N.I.Act').
2. Short facts involved in the appeal may be summed up thus:
The complainant is a private company engaged in the business advancing finances on lease and hire purchase agreements. Towards the sum collected as loan, executing 10 promissory notes covering a period from 15.1.994 to 21.7.1994, for various sums, and in discharge of the debt and liability thereunder, the accused issued Ext.P1 cheque for a sum of Rs.3,09,149/- promising its encashment on presentation in due course is the case of the complainant. The cheque presented was, however, dishonoured due to insufficiency of funds in the account maintained by the accused. Statutory notice issued intimating dishonour and demanding the sum covered by the cheque not being responded with payment the complainant launched Crl.A.No.183/02 - 2 - prosecution against the accused for the offence under Section 138 of the N.I.Act filing a complaint. The accused, on appearance, pleaded not guilty when the particulars of the offence were made known. Complainant examined P.W.1 to P.W.4 and got marked Exts.P1 to P22 to prove its case. The accused questioned under Section 313 Cr.P.C. reiterating his plea of innocence submitted that the documents produced by the complainant are forged and before entering into the money transaction with the complainant a signed cheque in blank form was collected from him, that subsequent loans were given only on discharge of the previous loan, that demand for returning the promissory notes which had been collected earlier in blank form with signature alone were declined on the pretext that they had been destroyed, and that no receipt was issued by the complainant on discharge of the earlier loan. In support of his defence, he produced Exts.D1 to D4. The learned trial magistrate, after appreciating the materials produced, accepting the case of the complainant found the accused guilty of the offence, and he was thereupon convicted and sentenced to pay a fine of Rs.3,25,000/- with default term of simple imprisonment for three months. In the appeal preferred by the accused against the conviction and sentence, after reappreciating the evidence and on hearing the counsel on both Crl.A.No.183/02 - 3 - sides, the learned Sessions Judge set aside the conviction and sentence and acquitted him of the offence. Correctness and legality of the order of acquittal so rendered by the learned Sessions Judge is challenged in this appeal by the complainant.
3. I heard the learned counsel on both sides.
4. Learned counsel for the complainant contended that the lower appellate court misread and misappreciated the evidence and applied wrong principles of law to enter an order of acquittal in favour of the accused, reversing the conviction founded against him by the trial magistrate. The accused had admitted of the execution of the cheque though he had denied the execution of the promissory notes when the loan amounts were collected, submits the counsel. The accused had also admitted, according to the learned counsel, the receipt of money from the complainant, but setting up a different version over the transaction. When that be the case, the lower appellate court was not justified, according to the learned counsel, in interfering with the conviction imposed against the accused by the trial magistrate for the solitary reason that the handwritings in Ext.P1 cheque as to the entries made therein differ from the signature subscribed which was admitted by the accused. The defence canvassed by the accused built upon the different handwritings seen Crl.A.No.183/02 - 4 - in filling up of Ext.P1 cheque is not worthy of any merit in the given facts of the case, contends the counsel placing reliance on Lillykutty v. Lawrance (2003(3) KLT 721) wherein it has been held that where the handwriting of the payee's name and the amount shown in the cheque differ from the handwriting of the drawer of the cheque it is not a ground to hold that it was not validly issued or the cheque was not duly executed. Learned counsel contended that when receipt of money and handing over of a signed cheque to the complainant is admitted by the accused, the burden was on the accused to show that it was handed over in blank form and there was no due execution of the instrument. The accused having not let in any positive evidence in support of that defence, it deserved only to be discarded as meritless, submits the counsel. Learned counsel, therefore, urged for setting aside the order of acquittal rendered in favour of the accused by the learned Sessions Judge and restoring the conviction passed against the accused by the learned trial magistrate by allowing this appeal. On the other hand, learned counsel for the accused supporting the impugned judgment of the learned Sessions Judge contended there there is no merit in the appeal and the materials produced in the case have unerringly established that the complainant had launched prosecution against Crl.A.No.183/02 - 5 - the accused forging various instruments even making false entries in Ext.P1 cheque which had been obtained from the accused in blank form with the signature alone. The accused had denied the execution of the cheque and in the given facts of the case without proving due execution of the instrument which the complainant has miserably failed, no conviction against the accused is permissible, submits the counsel. Previous notice issued by the complainant demanding the sum covered by the promissory notes without referring to Ext.P1 cheque is also highlighted by the learned counsel to contend that the defence version is more probable and the case of the complainant is unworthy of acceptance. The appeal filed by the accused impeaching the correctness of the order of acquittal passed by the lower appellate court, according to the learned counsel for the accused, lacks merit, and it is liable to be dismissed.
5. The primary question that emerges for consideration is whether the lower appellate court was correct in interfering with the conviction founded against the accused by the trial magistrate taking a different view from that of the magistrate after reappreciating the materials tendered in the case. After going through the judgments of the trial magistrate and also the lower appellate court with reference to the materials tendered and the submissions made by the learned Crl.A.No.183/02 - 6 - counsel on both sides, I find that the reversal of the conviction and rendering an order of acquittal by the learned Sessions Judge in the appeal is proper, valid and unimpeachable. The case of the complainant is that the accused executed 10 promissory notes over a period of nearly six and half months, for various sums, during which loans were availed, and later in discharge of the liability thereunder he issued Ext.P1 cheque for a sum of Rs.3,09,149/-. It is interesting to note that out of the ten promissory notes, the first nine of them for the sum ranging from Rs.6000 to Rs.45,000 were advanced over a period of 15.1.1994 to 11.2.1994. The last two of the above nine pronotes were on the same date, i.e. 11.2.1994, for sums of Rs.13,000 and Rs.15,000. The transaction covered by the 10th promissory note was on 21.7.1994 for a sum of Rs.1,80,000/-. To prove the loan transactions with the accused the complainant produced pronotes, eleven in number, Exts.P9 to P19, and examined its power of attorney, a bill collector of the company. In the complaint the case of the complainant was that the accused borrowed Rs.4,91,000/- through ten different promissory notes with different dates and towards discharge of the liability the accused issued Ext.P1 cheque for a sum of Rs.3,09,149/- promising its encashment on presentation and agreeing to pay the balance amount due within one Crl.A.No.183/02 - 7 - year. There is no whisper in the complaint that any of the amount covered by the promissory note had been discharged by the accused. But when evidence was let in one more promissory note (Ext.P12), over and above the ten promissory notes stated in the complaint, for a sum of Rs.40,000/- was produced. Ext.P12 promissory note is dated 24.1.1994. In the complaint giving the particulars of ten promissory notes with specific sums thereunder the complainant has alleged that the accused borrowed a sum of Rs.4,91,000/- and towards partial discharge of that liability, Ext.P1 cheque was issued for a sum of Rs.3,09,149/-. Particulars of the pronotes with the sum and date as alleged in the complaint are as hereunder:
1. Pronote for a sum of Rs.30,000/- dated 15.1.1994.
2. Pronote for a sum of Rs.15,000/- dated 18.1.1994.
3. Pronote for a sum of Rs.40,000/- dated 20.1.1994.
4. Pronote for a sum of Rs.30,000/- dated 28.1.1994.
5. Pronote for a sum of Rs.6,000/- dated 31.1.1994.
6. Pronote for a sum of Rs.40,000/- dated 3.2.1994.
7. Pronote for a sum of Rs.45,000/- dated 7.2.1995.
8. Pronote for a sum of Rs.30,000/- dated 11.2.1994.
9. Pronote for a sum of Rs.15,000/- dated 11.2.1994.
10.Pronote for a sum of Rs.1,80,000/- dated 21.7.1994. Crl.A.No.183/02 - 8 -
The total amount as under the above promissory notes comes to Rs.4,31,000/-. Obviously, the statement in the complaint with regard to the pronote for Rs.45,000/- (Sl.No.7) showing the date as 7.2.1995 might be a mistake, for the correct date of 7.2.1994.
6. Pronotes produced, 11 in number, and exhibited as Exts.P9 to P19 to prove the loan transactions of the complainant leading to issue Ext.P1 cheque disclose of material discrepancy with the particulars of pronotes and sum stated in the complaint. The particulars of pronotes exhibited as Exts.P9 to P19 are thus:
1. Ext.P9 pronote for Rs.30,000/- dated 15.1.1994.
2. Ext.P10 pronote for Rs.15,000/- dated 18.1.1994.
3. Ext.P11 pronote for Rs.40,000/- dated 20.1.1994.
4. Ext.P12 pronote for Rs.40,000/- dated 24.1.1994.
5. Ext.P13 pronote for Rs.50,000/- dated 28.1.1994.
6. Ext.P14 pronote for Rs.6,000/- dated 31.1.1994.
7. Ext.P15 pronote for Rs.40,000/- dated 3.2.1994.
8. Ext.P16 pronote for Rs.45,000/- dated 7.2.1994.
9. Ext.P17 pronote for Rs.30,000/- dated 11.2.1994.
10.Ext.P18 pronote for Rs.15,000/- dated 11.2.1994.
11.Ext.P19 pronote for Rs.1,80,000/- dated 21.7.1994.
The total sum as covered under these 11 pronotes (Exts.P9 to P19) Crl.A.No.183/02 - 9 - comes to Rs.4,81,000/-. It has to be noted that the pronote covered by Ext.P12 Rs.40,000/- dated 21.1.1994 is not included among the pronotes stated in the complaint. Similarly, Ext.P13 pronote dated 28.1.1994 is for a sum of Rs.50,000/- whereas in the complaint pronote dated 28.1.1994 is for a sum of Rs.30,000/-.
7. The discrepancies as above with regard to the pronotes as stated in the complaint with reference to the pronotes exhibited, Exts.P9 to P19, and the total sum calculated thereunder, could not be treated as inadvertent mistakes in drafting of the complaint and making reference to the pronotes with respective sums, is borne out by Ext.P20 agreement purported to have been executed by the accused acknowledging his liability for a sum of Rs.3,09,149/-, the sum shown in Ext.P1 cheque. Ext.P20 agreement is dated 14.5.1994. No reference to Ext.P20 agreement, leave alone the circumstances under which it was executed, is stated in the complaint. Complainant has examined one of the witnesses in Ext.P20 agreement, P.W.3 to prove its execution by the accused. The evidence of that witness in no way improves the case of the complainant when the circumstances surrounding Ext.P20 agreement are examined. Before going into that question, particulars stated in Ext.P20 agreement with reference to the account numbers and the sum covered by the loan transactions Crl.A.No.183/02 - 10 - with the accused have to be looked into, which read thus:
A/c No. Issued on Amount Balance on 14.5.1994
1200/94 15.1.1994 30,000.00 28,149.00
1202/94 18.1.1994 15,000.00 15,000.00
1204/94 20.1.1994 40,000.00 40,000.00
1206/94 24.1.1994 40,000.00 40,000.00
1208/94 28.1.1994 50,000.00 50,000.00
1210/94 31.1.1994 6,000.00 6,000.00
1212/94 03.2.1994 40,000.00 40,000.00
1215/94 07.2.1994 45,000.00 45,000.00
1216/94 11.2.1994 30,000.00 30,000.00
1218/94 11.2.1994 15,000.00 15,000.00
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3,09,149.00
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The total sum shown in the agreement as due from the accused on the date of agreement is Rs.3,09,149/-.
8. Whereas in the complaint, it is alleged that the transaction covered by Ext.P19 pronote for Rs.1,80,000/- dated 21.7.1994 also formed part of the liability covered by Ext.P1 cheque in evidence through P.W.!, the power of attorney holder, the complainant Crl.A.No.183/02 - 11 - projected a case that transaction was different and did not form part of the sum covered by Ext.P1 cheque which was issued towards partial discharge of the liability in respect of the previous transactions alone. In other words, the case developed by the complainant in evidence is based on Ext.P20 agreement and Exts.P9 to P18 pronotes excluding Ext.P19 pronote advancing a case that after adjustment of the payment made by the accused under Ext.D4 receipt in Ext.P9 promissory note, for the balance sum outstanding under the transaction covered by Exts.P9 to P18 pronotes Ext.P1 cheque for a sum of Rs.3,09,149/- was issued by the accused. In this context, the date of execution of Ext.P20 agreement which stand disputed by the defence advanced by the accused that signed cheque in blank form and pronotes and stamped papers, all in blank form, had been collected by the complainant-company, assumes much significance. Ext.P20 agreement is dated 14.5.1994. Long before filing the complaint, the complainant had issued an advocate notice dated 23.11.1994 to the accused in respect of which no reference is made in the complaint. That notice is produced by the accused and exhibited as Ext.D1. In Ext.D1 notice, the complainant has set forth a claim of Rs.4,89,149/- from the accused towards the liability arising under the loan transactions making reference to the various pronotes Crl.A.No.183/02 - 12 - and also an agreement purported to have been executed by him acknowledging his liability. To that notice the accused gave a reply through an advocate disputing the agreement alleged acknowledging liability and the execution of the pronote for Rs.1.80,000/- on 21.7.1994, while admitting that he had some money transactions with the complainant. Ext.P21 is that reply notice given by the accused. After receiving Ext.P21 reply, the complainant has filed the present complaint long thereafter, on the basis of Ext.P1 cheque without making any reference to the previous notice issued and the reply from the accused disputing the liability. After sending a reply covered by Ext.P21 disputing the liability specifically, denying the execution of Ext.P20 agreement and also Ext.P19 pronote for a sum of Rs.1,80,000/-, if the case of the complainant were to be believed, the accused gave Ext.P1 cheque towards discharge of the liability for the pronotes covered by Exts.P9 to P18, nearly four months after sending Ext.P21 reply notice. Whether it is so, of course arise for consideration if only the complainant has presented such a case with specific particulars thereof in the complaint. That was not done. Still examining such a possibility, the reply notice sent by the accused when intimation of dishonour of Ext.P1 cheque was issued is crucial and of vital importance. Complainant has not produced and exhibited Crl.A.No.183/02 - 13 - copy of the notice sent to the accused on dishonour of Ext.P1 cheque. The reply notice sent by the accused through his advocate is produced and exhibited as Ext.P7 in evidence. He has specifically contended that a cheque in blank form was issued as demanded by the complainant on 19.2.1994 and forging false entries in that instrument, the notice had been issued by the complainant. He has also referred to the previous reply notice sent by him in response to the earlier notice given by the complainant. The reply notice further show that he had filed caveat petitions before the civil court anticipating institution of suits by the complainant to get advance notice from the court before passing of any interim orders in such proceedings. The issuance of advocate notice earlier and reply received thereof from the accused, with the surrounding circumstances, disclose that the defence canvassed by the accused that the cheque was collected with his signature in blank form is more probable and it, further, discredits the version presented by the complainant in his evidence of which particulars are not furnished in its complaint.
9. The facts and circumstances involved in the case as referred to above, would indicate that an adjudication by a civil court regarding the liability of the accused in respect of the transaction Crl.A.No.183/02 - 14 - which he had with the complainant by instituting a proper suit before the appropriate court was necessary and unavoidable, and a complaint under Section 138 of the N.I.Act on Ext.P1 cheque alleged to have been executed by the accused, which was flatly denied by him, was not advisable nor proper. The sum covered by one among the promissory notes is not covered by Ext.P1 cheque is the version of P.W.1, the power of attorney of the complainant, and which is that promissory note has not been stated or explained in evidence. Complainant has a further case that in addition to the promissory notes, the accused had also executed an agreement dated 14.5.1994 acknowledging its liability under Exts.P9 to P18 promissory notes for a sum of Rs.3,09,149/-, the amount covered by the cheque. The accused had paid a sum of Rs.1851/- as covered by Ext.D4 receipt and that was given credit to in the amount due and for the balance sum of Rs.3,09,149/- Ext.P1 cheque was issued, is the conclusion formed by the learned trial magistrate. Strangely enough, no such case was alleged in the complaint nor deposed in evidence by P.W.1, the power of attorney holder of the complainant. On the contrary, when P.W.1 was examined, it has come out, the complainant had issued an advocate notice dated 23.11.1994 claiming an amount of Rs.4,89,149/-. The evidence of P.W.1 would show that the Crl.A.No.183/02 - 15 - complainant is a private limited company which is advancing finance for vehicles on furnishing security. The most interesting aspect is that though a series of promissory notes had been produced, Exts.P9 to P19 covering a period of over six months, if the case of the complainant were to be believed when Ext.P1 cheque was issued towards discharge of the liability under ten promissory notes out of the eleven pronotes, after giving credit to the amount under Ext.D4 receipt in Ext.P9 pronote, not even a single pai was claimed by the company towards interest on the finance advanced. This has to be viewed in the backdrop that the promissory notes Exts.P9 to P19 pronotes specifically state that the sum due is realisible with 24% interest per annum. A company advancing finances for purchase of vehicles after getting pronotes for the sum advanced with the liability to pay interest as stated above, was satisfied with the principal sum alone under the notes by collecting a cheque for such sum alone seems to be the case of the complainant if its case is to be accepted, which can be taken only with a pinch of salt.
10. The above circumstances viewed with another vitiating factor discrediting the complainant's case as a whole, as noticed by the learned Sessions Judge, related to the writings on Ext.P1 cheque. The learned Sessions Judge has taken note that the admission of Crl.A.No.183/02 - 16 - P.W.1, the power of attorney holder, that the entries in the cheque are made in three different writings. It was further noticed that the handwritings in the entries varied. P.W.1 would state that the manager of the company wrote the entires in Ext.P1 cheque, but it was signed by the accused in the presence of the Managing Director by the accused. Neither the manager nor the managing director was examined in the case to prove the due execution of Ext.P1 cheque by the accused despite his specific contention that blank signed cheque and blank stamped promissory notes had been obtained by him for providing finance and, later, when repayments were made, the pronotes were not returned on the pretext that they were destroyed. The learned Sessions Judge, after appreciating the materials produced, concluded that due execution of Ext.P1 cheque by the accused has not been proved by the complainant and therefore the conviction imposed against him by the trial magistrate was liable to be reversed. Accordingly, setting aside his conviction, the learned Sessions Judge acquitted the accused of the offence. I do not find any impropriety in the conclusion drawn and the findings so arrived by the learned Sessions Judge in the given facts of the case.
11. There is no merit in the submission of the learned counsel for the complainant that the burden was on the accused as he had Crl.A.No.183/02 - 17 - admitted of handing over a signed cheque and receiving of finance from the company. Ext.P1 cheque was duly executed by the accused has to be established by the complainant giving cogent and reliable evidence in the light of the defence canvassed that it was given in blank form with signature alone, and more particularly, on the materials presented by the complainant company prima facie indicating that the transactions relating the issue of the cheque was towards the principal sum covered by the promissory notes alone is unbelievable without convincing proof. The decision relied by the learned counsel for the appellant, namely, Lillykutty v. Lawrance (2003(3) KLT 721) has no application to the facts of the present case where the case of the complainant is found seen discredited not only by the difference in the writings on the instrument, but due to various other vitiating circumstances referred to earlier. The apex court in Narayana Menon v. State of Kerala [2006(3) KLT 404(SC)] has held that to rebut the presumption covered by the N.I.Act, what is needed is to raise a probable defence. For the said purpose, it is stated the accused need not adduce any evidence, but could show that his defence is probable on the materials tendered by the complainant itself. Whether the accused has discharged that burden, it has been stated by the apex court, would be a question of fact Crl.A.No.183/02 - 18 - depending upon the facts and circumstances involved in the case. In the present case not only that the due execution of Ext.P1 cheque by the accused was not established by the complainant but on the materials produced by the complainant itself it is shown that the defence canvassed by the accused that blank signed cheque and blank promissory notes had been collected by the complainant company at the time of providing finance is probable. In such circumstances, the order of acquittal passed by the learned Sessions Judge reversing the conviction rendered against him by the trial magistrate is unimpeachable.
The appeal is devoid of any merit and it is dismissed.
srd S.S. SATHEESACHANDRAN, JUDGE