Allowed

Ullattil Agencies v. the Malabar Food Processors(P)Ltd & 3 or

Kerala HC5 Sept 2016CRL.A/721/2009

Case brief

AI extract

What is this about?

The Kerala High Court allowed the criminal appeal against an acquittal, quashed the lower court judgment, convicted the respondents under Section 138 NI Act, and imposed imprisonment and compensation pending payment.

What did the court decide?

Impugned judgment reversed; respondents 1-3 convicted under Section 138 NI Act; A2 and A3 sentenced to imprisonment till rising of court and ordered to pay ₹1,64,000 as compensation.

Ullattil Agencies Vs the Malabar Food Processors(P)Ltd & 3 or — Cheque Dishonour | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE B.KEMAL PASHA

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MONDAY, THE 5TH DAY OF SEPTEMBER 2016/14TH BHADRA, 1938

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CRL.A.No. 721 of 2009 (A)

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AGAINST THE ORDER/JUDGMENT IN Crl.L.P. 244/2009 of HIGH COURT OF KERALA DATED 03-04-2009

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AGAINST THE ORDER/JUDGMENT IN ST 2425/2006 of J.M.F.C.,KOTTAYAM DATED 05-01-2009

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APPELLANT(S)//COMPLAINANT:

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ULLATTIL AGENCIES, THOFEQUE BUILDINGS, MARKER ROAD, KOTTAYAM, REPRESENTED BY ITS PARTNER, AND THE POWER-OF-ATTORNEY HOLDER OF THE MANAGING, PARTNER, JACOB THOMAS.

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BY ADVS.SRI.H.B.SHENOY SRI.GEORGE ITTY.T SRI.B.ASHOK SHENOY SMT.LAKSHMI B.SHENOY SRI.THOMAS P.MAKIL

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RESPONDENT(S)/ACCUSED & STATE:

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1. THE MALABAR FOOD PROCESSORS(P)LTD T.B.ROAD, KOTTAYM 686001,REPRESENTED BY ITS, MANAGING DIRECTOR, ISAAC GEROGE.

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2. SRI.ISAAC GEORGE, MANAGING DIRECTOR, THE MALABAR FOOD PROCESSORS (P) LTD.,T.B.ROAD,, KOTTAYAM 686001.

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CRL.A.No. 721 of 2009 (A)

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-2-

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3. SRI.SUSY GEORGE, DIRECTOR, THE MALABAR FOOD PROCESSORS (P) LTD.,T.B.ROAD, KOTTAYAM.

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4. STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM,, KOCHI-31.

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R1 TO 3 BY ADV. SRI.JOSEKUTTY MATHEW R4 BY PUBLIC PROSECUTOR SRI. ALEX M THOMAS

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THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 05-09-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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B. KEMAL PASHA, J.

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................................................................ Crl. Appeal No. 721 of 2009 ............................................................... Dated this the 5^th day of September, 2016

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J U D G M E N T

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The complainant partnership firm in S.T. No.2425/2006 of the Judicial First Class Magistrate's Court-I, Kottayam, has come up in appeal by challenging the judgment of acquittal passed by the court below in the private complaint filed by alleging an offence punishable under Section 138 of the Negotiable Instruments Act(for short 'N.I. Act'). The 1^st accused before the court below is a Private Limited Company, of which, A2 is the Managing Director and A3 is one of the Directors.

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A2 and A3 were impleaded in the complaint as persons responsible for the day to day affairs and the

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Crl. Appeal No. 721 of 2009

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business of the 1^st accused company. The complaint was preferred by one of the partners of the partnership firm, who was also the power of attorney holder of the partnership firm.

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The case of the complainant is that in discharge of the liability of the accused to pay an amount of ₹1,64,000/- to the complainant firm, the 3^rd accused issued Exts.P5, P6 and P7 cheques dated 26.06.2006 for ₹55,000/-, ₹55,000/- and ₹54,000/- respectively, to the complainant partnership firm. The said cheques, when presented returned dishonoured through Exts.P8, P9 and P10 memos, for insufficiency of funds in the accounts of the accused. Demand notice dated 03.07.2006 was caused to be issued to the accused, the copy of which is Ext.P12. A1 to A3 have received the notice as is evident from Exts.P16, 17 and 18 postal acknowledgement cards. The said notice did not evoke any response, and hence the complaint.

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On the side of the complainant, PWs.1 and 2

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Crl. Appeal No. 721 of 2009

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were examined and Exts.P1 to P20 were marked. No defence evidence was adduced. The court below found the accused not guilty of the offence punishable under Section 138 of the N.I.Act and acquitted them under Section 255(1) Cr.P.C., and hence the appeal.

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Heard the learned counsel for the appellant and the learned counsel for respondents 1 to 3.

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The court below has found fault with the appellant in not entering the entire details of the transactions in the private complaint. Further, the court below has observed that Exts.P5, P6 and P7 cheques were filled-in cheque leaves and according to PW1 and PW2, those filled-in cheque leaves were issued by the 3^rd accused for and on behalf of the first accused, to the partnership firm and that “no ordinary person is expected to receive the cheques which had already been filled ”. The said observation made

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by the court below is quite unfounded. It seems that the court below would have been satisfied in case those

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Crl. Appeal No. 721 of 2009

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cheques were issued as blank signed cheque leaves.

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PW1, who is the power of attorney holder and

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partner of the complainant partnership firm, has filed a detailed affidavit in lieu of chief examination. Similarly, PW2, who was a clerk working in the said firm has also filed a detailed affidavit in lieu of chief examination. PW1 has in detail narrated the entire transactions between the parties through the affidavit in lieu of chief examination. Ext.P1 is the copy of the partnership deed. Ext.P2 is the extract of Registration of Firms. Ext.P3 is the power of attorney. According to PW1, through the execution of 13 promissory notes during the period from 08.06.1999 to 11.12.1999, the accused had borrowed an amount of ₹5,72,000/- from the complainant partnership firm. Since the amounts were not repaid, the complainant as plaintiff, filed O.S.No.390/2002 against the accused before the Sub Judge, Kottayam. Ext.P4 is the copy of the complaint in the suit. Through judgment dated 07.03.2003 the suit was decreed in favour

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Crl. Appeal No. 721 of 2009

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of the plaintiff. Even then, the accused did not care to pay the amount covered by the decree, in order to discharge the decree. At the same time, on 01.06.2005 A2 and A3 had approached the complainant and issued eight post dated cheques in total for an amount of ₹5,75,000/- in favour of the complainant by way of partial discharge of the decree debt, for and on behalf of the first accused. The first cheque issued was honoured on presentation. The remaining seven cheques were dishonoured for insufficiency of funds in the accounts of the accused.

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The evidence of PW1 stands fully corroborated by the evidence of PW2. Nothing has been brought out in the cross examination of PW1 or PW2 in order to discard or disbelieve their versions.

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When examined under Section 313 Cr.P.C., A2 and A3 have filed a statement in writing by contending that the whole amount covered by the decree in O.S.No.390/2002 was discharged by them and even then,

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Crl. Appeal No. 721 of 2009

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PW1 has illegally made use of the blank signed cheque leaves which were not returned by the partnership firm even on discharge of the decree amount, in order to file false complaints against the accused.

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This is a case wherein, no reply notice was issued by the accused, even though they had received the demand notice. Had there been a bonafide contention that the amounts covered by the decree was discharged and even then PW1 was misusing the blank signed cheque leaves obtained by the complainant to file false cases, definitely in the normal course, the accused would have issued a reply. No reply has been issued to that effect. Of course, it is true that the accused is not bound to issue a reply as against a notice contemplated under Section 138(b) of the N.I. Act. At the same time, when facts are like this, in this particular context, the silence of the accused on getting the demand notice, speaks volumes against the accused.

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This is a case wherein the accused have gone to

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Crl. Appeal No. 721 of 2009

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the extent of contending that they have fully discharged the decree debt and therefore, the cheques are not supported by consideration. In such case when discharge has been pleaded, it is for the accused to prove such discharge through positive evidence. In this particular case, any of the accused has not cared to mount the box. When the facts have been narrated in detail by PW1 in the affidavit in lieu of chief examination, it seems that the complainant has brought out the necessary prima facie materials to invite the presumptions under Section 118(a) and 139 of the N.I. Act. It is for the accused to rebut the said presumptions.

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The court below has thrown out the complaint without any valid ground. The findings entered by the court below are devoid of merits and are not legally sustainable. This is a case wherein the complainant could clearly prove all the ingredients necessary to invite the offence under Section 138 of the N.I. Act. The acquittal of the accused in this case, has resulted in substantial miscarriage of justice

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Crl. Appeal No. 721 of 2009

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and therefore, the judgment passed by the court below is liable to be reversed.

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It stands proved that the accused have committed

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an offence under Section 138 of the N.I. Act, and they are liable to be convicted thereunder. Regarding the sentence, this Court is of the view that after this much period, it is not just and proper in the interest of justice to impose a long term of imprisonment on A2 and A3, especially, when the learned counsel for the respondents has pointed out that A2 and A3 are respectively 85 and 86 years old.

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In the result, this Criminal Appeal is allowed, and the impugned judgment passed by the court below is reversed. Respondents 1 to 3, who are the accused, are found guilty of the offence punishable under Section 138 of the N.I. Act, and are convicted thereunder. A2 and A3 are sentenced to undergo imprisonment till the rising of the court and they are ordered to pay an amount of ₹1,64,000/- as compensation to the complainant under Section 357(3) Cr.P.C., within two

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Crl. Appeal No. 721 of 2009

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months' from today, in default, each of them shall undergo simple imprisonment for three months.

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Sd/- B. KEMAL PASHA, JUDGE.

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ul/-

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// true copy //

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P.S. to Judge.

Ullattil Agencies v. the Malabar Food Processors(P)Ltd & 3 or

Case brief

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Ullattil Agencies v. the Malabar Food Processors(P)Ltd & 3 or

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