Kerala High Court
Shajahan T.M vs P.J.Abraham on 17 May, 2010
Equivalent citations: AIR 2012 (NOC) 20 (KER.), 2011 ACD 1056 (KER), (2011) 4 RECCIVR 729, (2011) 4 RECCRIR 564(2), (2012) 2 BANKCAS 186
Author: V.K.Mohanan
Bench: V.K.Mohanan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
CRL.A.No. 1914 of 2006()
1. SHAJAHAN T.M., S/O.MOULA RAWTHER,
... Petitioner
Vs
1. P.J.ABRAHAM, PUTHENPURAYIL HOUSE,
... Respondent
2. STATE OF KERALA,
For Petitioner :SRI.S.SREEKUMAR
For Respondent :SRI.LIJU.V.STEPHEN
The Hon'ble MR. Justice V.K.MOHANAN
Dated :17/05/2010
O R D E R
V.K.MOHANAN, J.
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Crl.A.Nos.1914,1917, 1918 & 1919 OF 2006
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Dated this the 17th day of May, 2010
J U D G M E N T
All these appeals are filed, under Section 378(4) of the Code of Criminal Procedure (for short 'Cr.P.C.') by the same complainant in four different prosecution cases for the offence punishable under Section 138 of the Negotiable Instruments Act,1881 (hereinafter referred for short as 'the N.I.Act' only) challenging the orders of acquittal recorded under Section 255(1) of the Cr.P.C., vide judgment dated 23.8.2006 of the Judicial First Class Magistrate Court-IV, Kochi in the above cases.
2. As the appellant in all these cases is one and the same person and the subject matter, especially the facts, circumstances and the question of law involved are identical and the first respondent/accused in each case are though different Crl.ANos.1914, 1917,1918 &1919 of 2006 :-2-:
persons, but as they are close relatives and as the imputation of allegations and the liability alleged against them are identical and connected and the impugned judgments deserve same treatment as the same are issued by the same court, these appeals were heard together and being disposed of by this common judgment.
Crl.A.No.1914 of 2006:-
This appeal is preferred by the complainant against the judgment dated 23.8.2006 in S.T.No.230 of 2004 of the Judicial First Class Magistrate Court-IV, Kochi-5 (Additional Munsiff, Kochi) against the first respondent/accused, one P.J.Abraham, wherein the case is connected with Ext.P8 cheque bearing No.635278 dated 9.8.2004 for an amount of Rs.15 lakhs.
Crl.A.No.1917 of 2006:-
This appeal is preferred by the complainant Crl.ANos.1914, 1917,1918 &1919 of 2006 :-3-:
against the judgment dated 23.8.2006 in S.T.No.235 of 2004 of the Judicial First Class Magistrate Court-IV, Kochi-5 (Additional Munsiff, Kochi) against the first respondent/accused, one Titto Abraham wherein the case is connected with Ext.P8 cheque bearing No.104589 dated 9.8.2004 for an amount of Rs.20 lakhs.
Crl.A.No.1918 of 2006:-
This appeal is preferred by the complainant against the judgment dated 23.8.2006 in S.T.No.380 of 2004 of the Judicial First Class Magistrate Court-IV, Kochi-5 (Additional Munsiff, Kochi) against the first respondent/accused, one Tojo Abraham wherein the case is connected with Ext.P8 cheque bearing No.106005 dated 9.8.2004 for an amount of Rs.20 lakhs.
Crl.A.No.1919 of 2006:-
This appeal is preferred by the complainant Crl.ANos.1914, 1917,1918 &1919 of 2006 :-4-:
against the judgment dated 23.8.2006 in S.T.No.237 of 2004 of the Judicial First Class Magistrate Court-IV, Kochi-5 (Additional Munsiff, Kochi) against the first respondent/accused, one Lillikutty wherein the case is connected with Ext.P8 cheque bearing No.104531 dated 9.8.2004 for an amount of Rs.15 lakhs.
3. In all these cases, the allegations raised and the facts and circumstances involved are identical and liabilities attributed against all the respondents/ accused are similar in nature and connected with the same transaction which I shall refer now.
4. According to the complainant, M/s.Kainady Tanneries Pvt.Ltd. (hereinafter referred to as 'company' only) is a company incorporated under the Companies Act, 1956 of which one Tony Abraham is the Managing Director and Mr.P.J.Abraham, Mr.Tito Abraham and Mr.Tojo Abraham are the Directors and the major shares of the company were held by the said Crl.ANos.1914, 1917,1918 &1919 of 2006 :-5-:
Lillykutty.
5. The father of said Tony Abraham, viz., P.J.Abraham is the first respondent/accused in Crl.A.No.1914 of 2006, who is one of the Directors of the company. The first respondent/accused in Crl.A.Nos.1917 and 1918 of 2006, respectively Titto Abraham and Tojo Abraham are the brothers of the said Managing Director- Tony Abraham and the sons of the above mentioned P.J.Abraham. The first respondent/accused in Crl.A.No.1919 of 2006 is the mother of the said Managing Director- Tony Abraham and also the first respondent/accused in Crl.A.Nos.1917 and 1918 of 2006 and the wife of Mr.P.J.Abraham, who is the first respondent/accused in Crl.A.No.1914 of 2006. According to the complainant, Lillikutty Abraham, though, she is not a member of Director Board of the company, she holds substantial number of shares of the said company. Crl.ANos.1914, 1917,1918 &1919 of 2006 :-6-:
6. According to the complainant, all the accused were actively involved in the day to day functioning of the company and its registered office was at Idayar and the company was engaged in the business of tanning of leather and manufacture of semi finished leather. According to the complainant, the company had availed loan from the Kerala Financial Corporation and thus, the company was indebted to the K.F.C. According to the complainant, he is also engaged in tanning of leather and for the said purpose, he had taken a factory on lease at Agraharam, Erode, Tamilnadu and he used to sell raw hides to the company and thus, he had got business relationship with the company and its Directors and shareholder right from 1992. Thus, it is the specific case of the complainant that the Kerala Financial Corporation initiated proceedings under Section 29 of the Kerala Financial Corporation Act for taking Crl.ANos.1914, 1917,1918 &1919 of 2006 :-7-:
possession of the company as huge amount was due to the Corporation. According to the complainant, the accused approached the complainant and requested for financial assistance and as he had full faith and confidence over the accused, to tide over the situation, the company and its Directors and shareholders together availed a loan of Rs.60 lakhs from the complainant in August, 2002.
7. According to the complainant, thereafter, on 2.11.2002, the Managing Director viz., Mr.Tony Abraham, who is not an accused in any of the case and the complainant executed an agreement, viz., Ext.P1 whereby the said Tony Abraham admitted the receipt of Rs.60 lakhs and acknowledged the liability to K.F.C. which is quantified and fixed, as per the said agreement, as Rs.156 lakhs. Another clause of the said agreement is that the complainant shall purchase the assets of the company after payment of dues, Crl.ANos.1914, 1917,1918 &1919 of 2006 :-8-:
which are quantified as Rs.156 lakhs, to the K.F.C. Another condition in the said agreement is to the effect that on paying the amount to the K.F.C., the title deed given as equitable mortgage by Tony Abraham would be released and would be pledged again in any other financial institutions and the amount so arranged, has been agreed to be repaid, towards the loan amount of Rs.60 lakhs, in instalments. According to the complainant, Ext.P1 agreement did not work out and no amount was paid to the complainant and hence, a fresh agreement dated 24.2.2003-Ext.P2 was executed between the company and the complainant and as per the provisions of the above mentioned fresh agreement, the company has offered to sell its assets and the company itself to the complainant and the complainant had agreed to purchase the same. Again as per the condition of the said agreement, the Crl.ANos.1914, 1917,1918 &1919 of 2006 :-9-:
complainant was authorised to negotiate with Kerala Financial Corporation to have an one time settlement. According to the complainant, in Ext.P2 fresh agreement, a particular clause was also incorporated to the effect that the amount so arrived has been agreed to be treated as the total sale consideration payable by the complainant to the company. Thus, according to the complainant, on 24.2.2003, Ext.P3 Power of Attorney was executed in favour of the complainant and though negotiation had taken place with the K.F.C., the same was not materialised. Thus, according to the complainant, as the company was running in heavy loss, the Directors of the company have decided to lease out the company to the complainant. Thus, on 1.4.2003, the unit was handed over to the complainant for effecting necessary repairs and according to the complainant, he had spent a sum of Rs.10 lakhs, being the expenses for the Crl.ANos.1914, 1917,1918 &1919 of 2006 :-10-:
repair works. The further allegation is to the effect that thereafter, on 10.6.2003, Ext.P4 document was executed incorporating the terms and conditions of the lease agreement, according to which, the lease was for a period of 11 months for a consolidated rent of Rs.10 lakhs which was adjusted towards the expenses met by the complainant for effecting repair works. According to the complainant, thus he was put in possession of the factory and the company.
8. According to the complainant, in the mean while, the Kerala Financial Corporation took over the possession of the company and they notified the company for sale towards the realisation of the debt amount. Thus, the complainant claimed that he had offered a sum of Rs.140 lakhs as total sale consideration as per his letter-Ext.P5 dated 25.9.2003 and in response to the said letter, the K.F.C., as per Ext.P6, informed the complainant accepting the offer Crl.ANos.1914, 1917,1918 &1919 of 2006 :-11-:
made by the complainant and he was further directed to remit one-third of the total sale consideration offered by him before 29.9.2003 and the balance amount before 15.10.2003. Thus, according to the complainant, he had paid the entire amount as directed by the K.F.C. and thus, he was put in possession of the company and factory and thus, according to him, he became the absolute owner and he is in possession of the company with effect from 25.2.2004.
9. It is the further case of the complainant that thereafter, all the accused persuaded the K.F.C. to release the document entrusted with it. According to the complainant, on 29.3.2004, another agreement, i.e., Ext.P7 was entered into and executed between the complainant and the Managing Director of the company, viz., Tony Abraham. As per the said document, a sum of Rs.60 lakhs due to the Crl.ANos.1914, 1917,1918 &1919 of 2006 :-12-:
complainant was acknowledged. Another clause of the said agreement is to the effect that it is agreed to repay the said amount in instalments. But, according to the complainant, the K.F.C. did not release the document.
10. It is the further case of the complainant that he was badly in need of money and hence, he persistently demanded the return of money. According to the complainant, as the company was highly indebted, the accused persons undertook to pay the amount from their personal account and accordingly, they issued the cheques in question. Therefore, according to the complainant, towards the discharge of the liability undertaken by the accused, viz., accused in S.T.No.230 of 2004 against which Crl.A.No.1914 of 2006 is preferred, issued cheque bearing No.635278 dated 9.8.2004 for an amount of Rs.15 lakhs, accused in S.T.No.235 of 2004 against Crl.ANos.1914, 1917,1918 &1919 of 2006 :-13-:
which Crl.A.No.1917 of 2006 is preferred, issued cheque bearing No.104589 dated 9.8.2004 for an amount of Rs.20 lakhs, accused in S.T.No.380 of 2004 against which Crl.A.No.1918 of 2006 is preferred, issued cheque bearing No.106005 dated 9.8.2004 for an amount of Rs.20 lakhs and accused in S.T.No.237 of 2004 against which Crl.A.No.1919 of 2006 is preferred, issued cheque bearing No.104531 dated 9.8.2004 for an amount of Rs.15 lakhs. Thus, according to the complainant, the above four cheques cover an amount of Rs.70 lakhs out of which Rs.60 lakhs is the amount availed as loan by the accused and out of remaining amount of Rs.10 lakhs, Rs.4 lakhs was paid by the complainant to one Virali Remanan towards the payment of value of wet blue purchased by the company and Rs.6 lakhs was received by one Sheriff, an employee of the company on various occasions from the complainant. Thus, it is the Crl.ANos.1914, 1917,1918 &1919 of 2006 :-14-:
specific case of the complainant that the cheques in question were issued by the accused towards the discharge of the liability undertaken by them connected with the company affairs. But, according to the complainant, when those cheques were presented for encashment, the same were not encashed for want of sufficient fund in the account maintained by the accused and also for the reason that the accounts were closed, consequent to which he caused to issue separate lawyer notice to each of the accused intimating the dishonour of cheque and demanding for payment of the amount covered by the dishonoured cheque. According to the complainant, in spite of the formal demand for the payment of the amount covered by the dishonoured cheque, no amount was paid by the accused and hence, he approached the court below by filing separate complaints.
11. The appellant/complainant filed four Crl.ANos.1914, 1917,1918 &1919 of 2006 :-15-:
separate complaints against the above mentioned accused before the Chief Judicial Magistrate Court, Ernakulam wherein cognizance was taken under Section 138 of the N.I.Act and thereafter, those cases were made over to the Judicial First Class Magistrate Court-IV, Kochi-5 (Additional Munsiff, Kochi) wherein the above complaints were registered as S.T.Nos.230, 235,380 and 237 of 2004. On the appearance of the accused, the particulars of the allegations and the offences were read over and explained to them and they denied the same and pleaded not guilty which resulted in further trial of the cases.
12. In S.T.No.230 of 2004 against which Crl.A.No.1914 of 2006 is filed, from the side of the complainant, two witnesses including the complainant were examined as PWs.1 and 2 and Exts.P1 to P16 were produced and marked. Ext.X2, the extract of the bank account pertaining to Ext.P8 cheque was also Crl.ANos.1914, 1917,1918 &1919 of 2006 :-16-:
produced and marked. From the side of the defence, the accused as well as the two other witnesses, viz., Dws.1 to 3 were examined. Exts.D1 to D8 documents were also marked from the side of the defence and Ext.X1, copy of particulars of appointment of Directors of the company was also marked.
13. Crl.A.No.1917 of 2006 is against S.T.No.235 of 2004 in which also from the side of the complainant, two witnesses were examined and Exts.P1 to P14 were marked and Ext.X1, particulars of bank statement of SBI pertaining to Ext.P8 was also marked. In this case, though no defence witness was examined, Exts.D1 to D5 were marked.
14. In S.T.No.380 of 2004 against which Crl.A.No.1918 of 2006 is filed, from the side of the complainant, PWs.1 to 3 were examined and Exts.P1 to P14 were marked. In this case also, Ext.X1, the particulars of account pertaining to Ext.P8 cheque in Crl.ANos.1914, 1917,1918 &1919 of 2006 :-17-:
that case is also marked. Though Exts.D1 to D4 were marked from the side of the defence, no witness was examined for the accused.
15. During the trial of S.T.No.237 of 2004 against which Crl.A.No.1919 of 2006 is filed, PWs.1 and 2 were examined and Exts.P1 to P14 and Ext.X1 Bank Statement pertaining to Ext.P8 cheque were marked. In this case also, though no witnesses were examined from the side of the defence, Exts.D1 to D4 were produced and marked.
16. When the accused were examined under Section 313 of Cr.P.C and when the incriminating circumstances and evidences were put to them, they denied the same. In all these cases, the accused took same defence and has raised though common, but specific plea, right from the reply notice, till they were examined under Section 313 of Cr.P.C. and throughout the trial of the case. According to the accused, Crl.ANos.1914, 1917,1918 &1919 of 2006 :-18-:
they did not execute and issue any cheque to the complainant and they controverted the contra claim of the complainant. According to the defence, when they were active in the company, they entrusted signed blank cheque leaves and stamp papers with Tony Abraham, who is the Managing Director of the company for the easy business transaction of the company since they were residing far away from the registered office of the company. According to them, thus the signed blank cheques which were entrusted with Tony Abraham, the Managing Director of the company and which were kept in the company, were stolen by the complainant who happened to be in possession of the company and by misusing the said cheques, he preferred those complaints. Thus, the accused specifically denied the execution and issuance of the cheques in question in favour of the complainant. The trial court, on the basis of the above Crl.ANos.1914, 1917,1918 &1919 of 2006 :-19-:
materials and after considering the rival pleadings, formulated three points for its consideration in all these cases, viz., whether the accused had issued the cheque in question to the complainant in discharge of a legally recoverable debt and whether the accused had committed the offence punishable under Section 138 of the N.I.Act and finally the sentence or order.
Thus, while considering the points formulated by the trial court and after considering the evidence and materials on record, the trial court has found that there is no dispute and there is no material to disbelieve the contention of the complainant that Tony Abraham, the Managing Director of the company had acknowledged the liability of Rs.60 lakhs owing to the complainant. Though the accused has tried to establish that they have no connection with the company right from 2000, the trial court found that the evidence adduced by the defence in this regard Crl.ANos.1914, 1917,1918 &1919 of 2006 :-20-:
need not be looked into as the complainant has no case that the cheques in question were issued for and on behalf of the company and thus, accordingly, the trial court has held that Section 141 of the N.I.Act is not attracted. The trial court has also found that the company has not been arrayed as an accused in any of the cases. After formulating the question as to whether the cheque was issued towards the discharge of any liability, the trial court has considered the allegations and claim of the complainant, in detail. The trial court has observed that the allegation, according to the complainant, is that the loan was availed of by the Directors during the month of August 2002 and subsequently, they issued the cheque to discharge the liability undertaken by them. The trial court has categorically found that Exts.P1 to P7 are not helpful for the complainant to show that there was any liability from the accused towards the Crl.ANos.1914, 1917,1918 &1919 of 2006 :-21-:
complainant. In the absence of any documentary evidence for fixing the liability as alleged by the complainant, the court has considered the evidence of PW1, the complainant. After elaborately considering the evidence of PW1, the trial court has specifically found that PW1 has no consistent case regarding the availing of loan, mode of payment and issuance of the cheque. Thus, on the basis of the findings arrived on by the court below, which are on purely factual basis, the trial court has held that the complainant is not successful in proving that the cheques in question were issued by the accused in discharge of a legally recoverable debt and further pointed out that the complainant has failed to prove that the accused has committed the offence punishable under Section 138 of the N.I.Act and accordingly, held that the accused are not guilty under Section 138 of the N.I.Act. Thus, the accused were acquitted under Section 255(1) of Crl.ANos.1914, 1917,1918 &1919 of 2006 :-22-:
Cr.P.C. It is the above findings and order of acquittal challenged in these appeals by the complainant and he sought for the interference of this Court, to reverse the order of acquittal of the accused and to convict the respondents/accused for the offence under Section 138 of the N.I.Act.
17. I have heard Sri.S.Sreekumar, learned counsel appearing for the appellant in all these cases and also Sri.Bechu Kurian Thomas, learned counsel appearing for the contesting respondents and Sri.C.S.Hrithwik, learned Public Prosecutor.
18. Mr.S.Sreekumar, reiterating the pleadings in the appeal memorandum as well as the pleadings taken in the trial court, contended that Exts.P1,P2,P3 and P7 would prove the liability of Mr.Tony Abraham, the Managing Director of the company, who is none other than the son of Mr.P.J.Abraham and Lillikutty and also the brother of the other accused viz., Titto Crl.ANos.1914, 1917,1918 &1919 of 2006 :-23-:
Abraham and Tojo Abraham and the consequent liability of the accused. It is also the case of the learned counsel that as execution of the cheque is admitted, the evidence of PW1 would further show that the cheques in question were issued towards the discharge of the liability acknowledged as per Exts.P1,P2,P3 and P7 and as undertaken by the accused. According to the learned counsel, the trial court committed a serious mistake in not giving the benefit namely, the presumption under Section 139 of the N.I.Act in favour of the prosecution-the complainant. It is the specific contention of the learned counsel that the accused has miserably failed to establish the defence case, on the other hand, the materials and evidence on record would show that the defence case is an utter false one. According to the learned counsel, the company was took over by the K.F.C. on 14.8.2003 and thereafter, the entire factory Crl.ANos.1914, 1917,1918 &1919 of 2006 :-24-:
was under the lock and key of K.F.C. and the complainant was put in possession of the company only on 24.2.2004 and therefore, absolutely there was no access for the complainant to any of the documents kept in the company. According to the learned counsel, the factory was brought under the possession of the complainant only after preparing an inventory and there was no mention in the inventory about the cheques in question. Learned counsel also argued that the finding of the trial court that the accounts were closed is not correct and the evidence of PW2, the Bank Manager shows that the account was closed only for the reason that the account holder did not maintain sufficient balance in the account and it was not closed at the request of the accused. Learned counsel would further submit that Exts.P1 to P4 and P7 documents were issued by the Managing Director of the company, who is closely related to the accused Crl.ANos.1914, 1917,1918 &1919 of 2006 :-25-:
and therefore, there is no meaning for insisting oral evidence to prove the legal liability. According to the learned counsel, the trial court ought to have accepted the evidence of PW1, the complainant and the approach made by the trial court disbelieving the evidence of PW1 is highly illegal and erroneous. It is also the contention of the learned counsel that the trial court has placed much reliance upon Ext.D1 suit to disbelieve PW1. Learned counsel pointed out that the said suit was filed after the issuance of lawyer notice and therefore, the civil and criminal proceedings initiated by the accused cannot be taken as a ground to disbelieve the case of the complainant and to acquit the accused. The learned counsel further submitted that the finding of the trial court to the effect that the materials on record and preponderance of probabilities probabilise the defence case is wrong and faulty. In support of the Crl.ANos.1914, 1917,1918 &1919 of 2006 :-26-:
above submission and arguments, the learned counsel placed reliance upon the decisions reported in Krishna Bai v. Arti Press (1992(2) KLT 40), Alexander v. Joseph Chacko (1993(2) KLT 326), Gopi v. Sudarsanan (2002(1) KLJ 783), Mohanan v. Bibhukumar (2003(2) KLT 825), Salim v. Thomas (2004(1) KLT 816), Goa Plast(P) Ltd. v. Chico Ursula D'Souza [(2004)2 SCC 235), Narayana Menon v. State of Kerala [2006(3) KLT 404 (SC)], Krishna Janardhan Bhat v. Dattatraya Hegde [2008(1) KLT 425(SC)], Sree Sakthi Paper Mills Ltd. v. Anjaneya Enterprises (2007(4) KLT 215), Komalam v. Mohankumar [2009(3) KLT 263] and K.N.Beena v. Muniyappan and Another [(2001)8 SCC 458] and Bhaskaran Nair v. Mohanan [2009(2) KLT 897].
19. Whereas stoutly opposing the appeal and the contentions raised by the learned counsel for the Crl.ANos.1914, 1917,1918 &1919 of 2006 :-27-:
appellant, Mr.Bechu Kurain Thomas, learned counsel appearing for the contesting respondents/accused contended that there is no document or any other substantial evidence to show that the accused availed loan of a sum of Rs.60 lakhs from the complainant during the month of August,2002 as claimed by the complainant. Learned counsel submitted that Exts.P1 to P7 relied on by the complainant would not show that the accused had made any demand for the loan from the complainant and they have received any amount. Learned counsel pointed out that during the trial, though the complainant has miserably failed to produce any document fixing any legal liability on the accused, to be discharged by them, it is pointed out that during the cross-examination, PW1 has categorically stated that he had obtained a pro-note from the accused, when he paid the amount. On the basis of the above evidence of PW1, the learned Crl.ANos.1914, 1917,1918 &1919 of 2006 :-28-:
counsel submitted that in the absence of any other document to fix the liability of the accused and especially when Exts.P1 to P7 are not sufficient to prove that the accused had availed of any loan or any financial commitment to the complainant, it was incumbent upon the complainant to produce the pro- note which he claimed being in his possession and thereby he could have produced better evidence for the scrutiny of the court. But the complainant withheld such legal and better evidence from the scrutiny of the court and therefore, an adverse presumption has to be drawn against the complainant. Learned counsel invited my attention to the deposition made by PW1 during his chief examination as well as the cross examination and also to the averments in the complaint, which according to the learned counsel, as rightly held by the trial court are inconsistent and contradictory in nature. According to the learned Crl.ANos.1914, 1917,1918 &1919 of 2006 :-29-:
counsel, the contention of PW1 that the accused who are the Directors and shareholders availed of loan from the complainant is unbelievable, especially in the absence of any materials to that effect. Another point argued by the learned counsel for the contesting respondents is that the undertaking, alleged to have made by the accused to pay the amount is not proved and there is a lapse of two years from the date of the alleged loan and the undertaking. It is also the case of the learned counsel that there is glaring mistake and inconsistency, regarding the date of the issuance of the cheque, stated in the deposition, in the complaint and in the proof affidavit. Therefore, according to the learned counsel, regarding the transaction, especially the availing of loan, undertaking of the accused for the payment of the debt and issuance of the cheque, there is full of inconsistencies and contradictions. Learned counsel Crl.ANos.1914, 1917,1918 &1919 of 2006 :-30-:
further pointed out that PW2 stated that the account has not been operated after 1992 and thus, the said fact would tally with the defence set up by the accused. It is also pointed out by the learned counsel that the suit was filed on 20.8.2004 even before receiving the lawyer notice. According to the learned counsel, Exts.D5 and D6 would further show that the accused has taken legal steps against the alleged misuse of the cheques in question. The learned counsel further submitted that the trial court has, after considering the entire materials and evidence on record, come into a conclusion that the complainant has not succeeded in establishing the case against the accused and the appellate court will not be justified in interfering with such factual finding and order of acquittal, especially when there is no legal flaw. In support of the above submissions, the learned counsel very much relied upon the decisions reported in Crl.ANos.1914, 1917,1918 &1919 of 2006 :-31-:
Bhaskaran Nair v. Mohanan [2009(2) KLT 897], Krishna Janardhan Bhat v. Dattatraya Hegde [(2008)4 SCC 54], Narayana Menon v. State of Kerala [2006(3) KLT 404 (SC)], Prakashan v, Surendran [2007(4) KLT 502 (SC)], Kamala v. Vidhyadharan [2007(3) KLT 861 (SC)] and Gopan v. Tonny Vaghese [2008(1) KLT 257].
20. I have carefully considered the arguments advanced by learned counsel for the appellants as well as the contesting respondent and also examined the evidence and materials on record. I have also gone through the authorities cited by both the counsel.
21. In the light of the arguments advanced by the counsel for the contesting parties and material and evidence on record, the question to be considered is whether the trial court is right in holding that the complainant has not succeeded in proving that the cheques in question were issued by the accused in Crl.ANos.1914, 1917,1918 &1919 of 2006 :-32-:
discharge of any legally recoverable debt and also the finding that the complainant has not successfully proved that the accused has committed any offence punishable under Section 138 of the N.I.Act. On a close analysis of the allegations, the case of the complainant can be summarised that the accused were the Directors and share holder of the company and the company was highly indebted to K.F.C. and in order to get over the financial crisis of the company, the accused availed of loan for Rs.60 lakhs during the month of August, 2002 from the complainant and when demanded the money, the accused undertook to pay the amount and towards the discharge of such liability undertaken by them, the accused issued the cheques in question which when presented for encashment, were dishonoured. The accused denied the entire transaction including the loan claimed and alleged by the complainant and it was the specific plea Crl.ANos.1914, 1917,1918 &1919 of 2006 :-33-:
that no such cheque was executed and issued in favour of the complainant. This Court in Bhaskaran Nair's case (cited supra) has held that when the accused denied the execution and issuance of the cheque, the court has to consider in detail, the transaction, execution and issuance of cheque. As indicated earlier, the trial court, after appreciating the materials and evidence on record, found that there is no document to substantiate the claim of the complainant that the accused has availed of loan from the complainant. It is the specific finding of the trial court that Exts.P1 to P7 are not sufficient to substantiate such allegation. The trial court has also undertaken an elaborate enquiry to find out whether the evidence of PW1 is sufficient to establish that the accused has availed of loan from the complainant and whether the complainant had established such a case. But the answer was in negative. The above factual Crl.ANos.1914, 1917,1918 &1919 of 2006 :-34-:
questions were answered by the trial court, which is the fact finding court, against the complainant and there is no scope for this Court in appeal to take a different view after re-appreciating the same evidence. However, according to me, it is not out of place to refer certain facts, evidence and circumstances involved in the case in order to assess the correctness of the finding of the trial court.
22. As correctly observed by the trial court, the company is not arrayed as an accused. It is also relevant to note that there is no prosecution against the Managing Director of the company and he is also not made as a co-accused in the present case. It is true that the accused in these cases are closely related to the Managing Director of the company, being the parents and brothers. It is also true that the accused were closely associated with the functioning of the company. It is also beyond dispute Crl.ANos.1914, 1917,1918 &1919 of 2006 :-35-:
that the company was under acute financial crisis. Probably, the above factors are sufficient to create a serious and strong doubt in support of the case of the complainant. But, the doubt, however, strong it is, is not sufficient to replace the requirement of legal evidence to establish the case of the complainant beyond reasonable doubt to fix criminal liability against the accused.
23. In order to attract the penal liability under Section 138 of the N.I.Act, it has to be established that the cheque drawn by the accused on an account maintained by him with the banker for payment of any amount of money to another person from out of that account was issued for the discharge, in whole or in part, of any debt or other liability,...........
Therefore, the complainant has to establish that the cheque in question was issued "for the discharge, in whole or in part, of any debt or other liability". In the Crl.ANos.1914, 1917,1918 &1919 of 2006 :-36-:
present case, it is true that the cheques in question were produced by the complainant from his possession. But, the accused had denied the execution and issuance of cheque. Therefore, the trial court rightly formulated the issue as to whether the complainant had established that the cheque in question was issued towards the discharge of any debt or liability. Though I have repeatedly gone through the evidence of PW1 and the documents, I failed to find out any legal evidence so as to hold that the accused has any debt or any liability towards the complainant. In this juncture, it is relevant to note that Exts.P1 to P7 are in no way connected with the accused and the said documents do not create any liability upon the accused and any right in favour of the complainant over the accused. As rightly pointed out by the learned counsel for the contesting respondents, the complainant was very particular to Crl.ANos.1914, 1917,1918 &1919 of 2006 :-37-:
create document connected every dealing as evidenced by Exts.P1 to P7. But, in the case of alleged availing of loan and undertaking of such liability, there is no such document creating any liability upon the accused. It is also relevant to note that though PW1 has claimed that the accused has issued a pro-note, he had not produced the same and thereby kept away a better documentary evidence from the scrutiny of the court. This is a strong circumstance to hold adverse presumption against the complainant. In the absence of any documentary evidence regarding the availing of loan and the so- called undertaking made by the accused, the trial court has already considered and examined the correctness of the claim and allegations of the complainant, in the light of the oral evidence of PW1 and found against the complainant. The trial court observed that had the Directors jointly availed of the Crl.ANos.1914, 1917,1918 &1919 of 2006 :-38-:
loan in the year 2002, the same would have found a place in Ext.P1 agreement, and according to me, such observation appears to be correct and perfect. On going through the deposition of PW1, it can be seen that the complainant has no specific and consistent case regarding the availing of the loan. Regarding the actual mode of payment of the loan amount, there is no definite claim or consistent case. During the cross-examination, PW1 has stated that the amount was paid and received during the month of August, 2002 and the same was effected in three instalments. But, this is against the version of PW1 in his chief examination. In the absence of any concrete and convincing evidence regarding the loan transaction or creating financial liability, it cannot be held that the complainant has succeeded in establishing any debt or liability due to the complainant from the accused. Thus, according to Crl.ANos.1914, 1917,1918 &1919 of 2006 :-39-:
me, the appellant/complainant has miserably failed to prove that the accused was indebted to the complainant or there was any liability due to the complainant to be discharged by the accused, thereby the essential ingredients of Section 138 has not been established and I find no error on the finding of the trial court in this regard and hence, the above finding of the trial court is only to be approved.
24. The next point to be considered is whether the complainant had succeeded in establishing that the cheques in question were executed and issued by the accused in favour of the complainant. It is true that the cheques in question were produced by the complainant from his possession. The accused has got a very specific case as to how the cheques in question were reached in the hands of the complainant.
According to them, the cheques in question pertained to the accounts which were closed much earlier. Crl.ANos.1914, 1917,1918 &1919 of 2006 :-40-:
Those cheques were, after putting their signatures, entrusted with the Managing Director of the company for the smooth running of the business, while they were actively involved in the affairs of the company, along with other blank signed documents, as the accused were residing far away from the head quarters of the company. Thus, according to the accused, the blank cheques signed by the accused and entrusted with the Managing Director, were stealthily removed by the complainant from the company, when the company was under his control and possession. Learned counsel for the appellant very much argued that the defence has though taken such a plea, the same was not established and the trial court committed wrong in accepting the above plea of the accused. The trial court, correctly following and applying the legal position, as clarified by the Apex Court in the decision reported in Narayana Menon v. Crl.ANos.1914, 1917,1918 &1919 of 2006 :-41-:
State of Kerala [2006(3) KLT 404 (SC)], has held that the accused can establish the defence case by pre-ponderance of probabilities to discharge its burden of rebutting presumption. In this juncture, it is relevant to note that by endorsing the finding arrived on by the court below, I have already held that the complainant has miserably failed to establish any legal debt or liability from the part of the accused towards the complainant. If that be so, it is heavily upon the complainant to establish the execution and issuance of cheque. Regarding the execution and issuance of the cheque, there is no concrete material or evidence. The accused has disputed the contents of the cheques in question, except the signature. There is no document as to how and when the cheques in question were handed over to the complainant. The defence evidence would show that the accounts, to which the cheques in question pertained, were not Crl.ANos.1914, 1917,1918 &1919 of 2006 :-42-:
operating after 1992. The fact that the accounts pertained to the cheques in question were not operating after 1992, has to be considered in the light of the contention of the accused that the cheques in question were entrusted with the Managing Director of the company when the accused were actively involved in the affairs of the company and the same was stealthily removed by the complainant from the company, when the complainant was in possession of the company. In this juncture, it is also relevant to note that regarding the actual issuance of the cheque in question, PW1 has no specific case either in the complaint or in the proof affidavit. When PW1 was cross-examined in S.T.No.230 of 2004 against which Crl.A.No.1914 of 2006 was filed, he had stated as follows:-
"2004 .
9.8.2004
Crl.ANos.1914, 1917,1918 &1919 of 2006 :-43-:
."
So, the entire allegation and claim that the cheques in question were issued on 9.8.2004 is absolutely incorrect and baseless, and as such, there is no cogent and satisfactory evidence regarding the execution and issuance of the cheques. It is also relevant to note that before filing the complaint, the accused issued Ext.P14 reply notice to Ext.P11 lawyer notice of the complainant. The accused have got a specific and consistent case, as borne out from Ext.P14 reply notice, their 313 statement and also the suggestions made through the cross-examination of PW1. Though the complainant was fully aware of the possible defence, he miserably failed to take appropriate pleadings and allegations in the complaint and also incorporating necessary factual allegations and assertions in the proof affidavit. In the light of the Crl.ANos.1914, 1917,1918 &1919 of 2006 :-44-:
above facts and circumstances and the discussion, I cannot find any fault with the observation of the trial court that the complainant has no consistent case regarding the payment of the amount and issuance of the cheque and the further observation that the accused has raised a probable defence. It is just and pertinent to note that, in fact, as rightly observed and held by the trial court, the complainant has no case that the accused has issued the cheques for and on behalf of the company. It is also beyond dispute that the complainant has not arrayed neither the company nor its Managing Director Mr.Tony Abraham as co- accused in the prosecution case. In Exts.P1 to P7, no liability is created against the accused and they are not parties and signatories to such documents. Therefore, whatever be the allegations and liability against the company and the Managing Director, even if the same are conceded as proved, nothing to do Crl.ANos.1914, 1917,1918 &1919 of 2006 :-45-:
with the accused. There is no document to substantiate the alleged undertaking made by the accused. Therefore, it was incumbent upon the appellant/complainant to establish the legal debt and liability of the accused, so as to execute and issue cheques pertained to the personal account of the accused. But, in that count also, the complainant has miserably failed. In view of the above facts and circumstances and the materials referred above, I am of the view that the complainant has miserably failed to establish the essential ingredients of Section 138 that there was legally enforceable debt or liability due to the complainant from the accused and towards the discharge of such debt or liability, the accused had executed and issued the cheques in question.
25. Though the learned counsel for the appellant argued elaborately, nothing was brought to my notice to show that the trial court has overlooked any Crl.ANos.1914, 1917,1918 &1919 of 2006 :-46-:
material or evidence and also any legal flaw in arriving its conclusion against the complainant and in favour of the accused. In the decision reported in Ghurey Lal v. State of U.P. [2008(4) KLT SN 17 (C.No.17), the Apex Court has laid down certain circumstances under which the appellate court can interfere with the order of acquittal. In the said decision, the Apex Court has held that the Appellate Court can interfere with an order of acquittal only for very substantial and compelling reasons. Reiterating the same position, the Apex Court has held in Batcu Venkateshwarlu and Ors. v. Public Prosecutor, High Court of A.P. [2009(1) Supreme 67] that in the case of acquittal, there is double presumption in favour of the accused and there must be substantial and compelling reasons for holding that the trial court was wrong and then only, the appellate court can, while exercising the appellate jurisdiction, interfere Crl.ANos.1914, 1917,1918 &1919 of 2006 :-47-:
with the order of acquittal passed by the trial court. In the present case, the appellant has miserably failed to point out any compelling or substantial reasons and hence, this Court is not justified in interfering with an order of acquittal and thereby disturbing the presumption of innocence found by the trial court in favour of the accused.
In the light of the above facts and circumstances and the discussion, I find no merit in these appeals and the same are liable to be dismissed. In the result, these appeals are dismissed.
V.K.MOHANAN, Judge.
MBS/ Crl.ANos.1914, 1917,1918 &1919 of 2006 :-48-: