Dismissed

K.P.Raveendranath v. K.P.Padmanabha Kurup

Kerala HC6 Jun 2017Crl.L.P./179/2017

Case brief

AI extract

What is this about?

The High Court of Kerala dismissed three criminal leave petitions filed by a complainant seeking special leave to appeal against the acquittal of the accused in cheque bounce cases. The court held that the trial court was justified in acquitting the accused due to the complainant's suppression of material transaction facts and contradictions in evidence.

What did the court decide?

Special leave to institute criminal appeals against the acquittal is refused; the leave petitions are dismissed.

K.P.Raveendranath Vs K.P.Padmanabha Kurup — Cheque Dishonour | Kerala HC (2017)

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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 ALEXANDER THOMAS

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TUESDAY, THE 6TH DAY OF JUNE 2017/16TH JYAISHTA, 1939 Crl.L.P..No. 179 of 2017 ()

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STC.297/2009 of JUDICIAL FIRST CLASS MAGISTRATE COURT, THALASSERY

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PETITIONER(S):

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K.P.RAVEENDRANATH, S/O.PADMANABHAN, SHALIMAR, P.O.KAVUMBHAGAM, VIA THALASSERY, REP. BY HIS POWER OF ATTORNEY HOLDER AND WIFE LALITHA A.K., W/O.K.P.RAVEENDRANATH, SHALIMAR, P.O.KAVUMBHAGAM, VIA THALASSERY, KANNUR DISTRICT.

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BY ADV. SRI. BINOY RAM V.

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RESPONDENT(S):

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1.K.P.PADMANABHA KURUP,

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NEAR SWAMI TALKIES, SANATH NAGAR, HYDERABAD, ANDRA PRADESH, PIN: 500 018.

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2.STATE OF KERALA,

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REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, PIN: 682 031.

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R1 BY ADV. SRI.K.P.SUDHEER

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R2 BY PUBLIC PROSECUTOR SRI. SAIGI JACOB PALETTY

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THIS CRIMINAL LEAVE PETITION HAVING BEEN FINALLY HEARD ON 06-06-2017, ALONG WITH CR.LP.180/2017 AND CR.LP.181/2017, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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Crl.L.P..No. 179 of 2017 ()

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APPENDIX

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PETITIONER(S)' ANNEXURE

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ANNEXURE I TRUE COPY OF THE APPEAL MEMORANDUM IN CRL.A.437/2013 FILED BEFORE THE SESSIONS COURT, THALASSERY

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RESPONDENT(S)' ANNEXURE

NIL

TRUE COPY

P.S. TO JUDGE

ALEXANDER THOMAS, J.

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-------------------------------------------------Crl.L.P.Nos.179, 180 & 181 of 2017 --------------------------------------------------Dated this the 6^th day of June, 2017

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O R D E R

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These three petitions have been filed by the complainant seeking special leave of this Court under Section 378(4) of the Cr.P.C., so as to institute Criminal Appeals for impugning the common judgment dated 31.10.2013 rendered by the Judicial First Class Magistrate Court, Thalassery in S.T.C.Nos.291, 297 of 2009 and 3012 of 2010whereby the accused therein (first respondent herein) has been acquitted.

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Sri.K.P.Sudheer, Advocate, has taken notice for R1 at the stage of the delay condonation in this Leave Petition. Crl.Leave Petition No.179 of 2017 arises out of S.T.C.No.297 of 2009 and Crl.Leave Petition No.181 of 2017 arises out of S.T.C.No.291 of 2009 whereas Crl.Leave Petition No.180 of 2017 arises out of S.T.C.No.3012 of 2010. The complainant and the accused in all these cases are the same persons. The complaints were jointly tried and the trial court has rendered a common judgment of acquittal in these cases. The cheque dated 1.2.2008 involved in S.T.C.No.297 of 2009 is for Rs.3,00,000/whereas the cheque dated 1.2.2008 involved in S.T.C.No.291 of 2009 is for Rs.3,50,000/- and the cheque dated 1.1.2008 involved in S.T.C.No.3012 of 2010 is for Rs.3,50,000/- and thus the total amount

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Crl.L.P.Nos.179, 180 & 181/17

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covered by these three cheques comes to Rs.10,00,000/-. According to the complainant, those cheques were issued by the accused in discharge of the liability owed by him to the complainant and the cheques when presented resulted in dishonour for want of ‘insufficiency of funds’ and after following the prescribed formalities, the instant three complaints have been initiated which led to the joint trial in these cases.

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Heard Sri.V.Binoy Ram, learned counsel appearing for the petitioner/complainant, Sri.K.P.Sudheer, learned counsel appearing for R1/accused herein and Sri.Saigi Jacob Palatty, learned prosecutor appearing for R2/State.

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During trial, the complainant was examined as PW1 and another witness has been examined as PW2 and the prosecution has marked Exhibits P1 to P21 documents. The defence has not adduced any oral evidence and has marked Exhibit D1 agreement executed on 1.1.2001.

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On a perusal of the impugned judgment of acquittal, it is seen that the following are the main grounds on the basis of which the trial court has rendered the considered judgment of acquittal in these cases.

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(A) It was found that the complaints were totally bereft of any details as

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to the very nature of the transactions which was later alleged by the

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Crl.L.P.Nos.179, 180 & 181/17

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complainant (PW1) in the course of his deposition as a witness. The case projected by the complainant in his evidence as PW1 was to the effect that the Company belonging to the petitioner was sold for a total consideration of Rs.22,00,000/- to the accused and that it was in discharge of that liability that the accused had issued the abovesaid three post dated cheques and that the cheques were actually executed and handed over by the accused to the complainant in 2006. The trial court found that there is not even a whisper in the complaints regarding any of the crucial aspects relating to the transaction.

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(B) In evidence, PW1 has projected a case that his Company was sold to the accused for a total amount of Rs.22,00,000/-. He has also deposed that the sale consideration in that regard is for Rs.15,00,000/- and it is for that the three cheques have been given. After initially deposing that the accused had purchased the Company from PW1 for Rs.22,00,000/-, it has also been stated that during mediation, he had settled the matter and the accused had agreed that he is ready to pay Rs.12,50,000/- to PW1 and that to discharge his said debt, the accused had issued the three post dated cheques in December, 2006. Therefore, there are major contradictions and inconsistencies even about the very sale

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Crl.L.P.Nos.179, 180 & 181/17

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consideration projected by the complainant.

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(C) On the one hand, PW1 would depose that he had sold his Company to the accused. On the other hand, it has clearly come out in evidence on the basis of admissions of PW1 that there was only an agreement for transfer of the shares for the Company. It is trite that sale of a Company can be concluded only after the shares are transferred to the prospective purchaser. PW1 has even admitted during cross examination that his shares in the Company have not so far been transferred in favour of the accused and further that he has not even signed any papers in order to transfer the shares in favour of the accused. Therefore, the trial court has rightly found that transfer of the right of the complainant as the major shareholder of the Company would be completed only when the entire shares are transferred in favour of the accused and that it clearly shows that the sale of the Company in favour of the accused has not been proven even at the time of the deposition rendered by PW1. It is trite law that if the prospective purchaser gives only an advance in pursuance of the agreement for purchase/sale and so long as the sale of properties is not concluded, the mere fact that he had made advances of moneys through cheques and that later, he does not honour the purchase agreement will not lead to a

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Crl.L.P.Nos.179, 180 & 181/17

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situation of enforceable liability as against such a purchaser in respect of the cheques issued by him, so as to make out an offence under Section 138 of the Negotiable Instruments Act. The legal position in this regard has been well settled by the judgment of the Apex Court in Indus Airways (P) Ltd. v. Magnum Aviation (P) Ltd. reported in 2014 (12) SCC 539 , wherein it has been held that if at the time of entering into a contract, it is one of the conditions of the contract that the purchaser has to pay the amount in advance and there is breach of such condition, then purchaser may have to make good the loss that might have occasioned to the seller, but that does not create a criminal liability under Section 138 of the Negotiable Instruments Act and for a criminal liability to be so made out under Section 138 of the Negotiable Instruments Act, there should be a legally enforceable debt or other liability subsisting on the date of the drawal of the cheque. The Apex Court have categorically held that one cannot accept the view that issuance of cheque towards advance payment at the time of signing of such purchase/sale agreement has to be considered as subsisting liability and that dishonour of such cheque amounts to an offence under the Negotiable Instruments Act. Therefore, the trial court has rightly held that as even the formalities of transfer of shares of the

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Crl.L.P.Nos.179, 180 & 181/17

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Company has not even been commenced by the complainant, there is no question of alleging any enforceable debt or liability, so as to attract the offence under Section 138 of the Negotiable Instruments Act.

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(D) Exhibit D1 is an agreement between the parties which is executed on 1.1.2001. It has been clearly found by the trial court that the complainant has not raised any dispute regarding the genuineness of that document at the time of marking the said document (Exhibit D1). Exhibit D1 clearly states as follows :

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"that the shares held by the existing following individuals will be transferred to Sri.KPadmanabha Kurup.”

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The aforementioned Sri.K.Padmanabha Kurup is the accused

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herein. Further Exhibit D1 would show that the accused has issued 10 cheque leaves of various dates in favour of the complainant. The purpose of issuing the said cheques has not been instituted in

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Exhibit P1 nor was it in any manner explained by PW1 when Exhibit D1 was confronted to him. The trial court thus found that the recitals in Exhibit D1 clearly shows that there is only an offer for the sale of shares of PW1 and PW2/accused and that Exhibit D1 does not show that the rights of PW1 were transferred in favour of the accused. Further that Exhibit D1 would clearly show that the accused had spent Rs.7,00,000/- from his pocket in connection with

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Crl.L.P.Nos.179, 180 & 181/17

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a litigation involving this Company and that it clearly establishes that the accused is not a person having any dishonest interest to defraud his creditors.

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(E)The trial court further found from Exhibit P4 reply notice dated 18.3.2008 issued by the accused that the cheques were issued as security and that the accused had issued a letter on 16.7.2006 itself calling upon PW1 to return the cheque leaves. In cross examination PW1 has admitted that the accused had issued the said notice to PW1 on 16.7.2006. Since PW1 has clearly admitted the receipt of the said notice issued by the accused on 16.7.2006, the trial court has found that it could be concluded that the accused has issued notice to PW1 as early as on 16.7.2006 asking him to return the cheque leaves presented by him and that this shows that many cheque leaves were entrusted by the accused to the complainant in relation to the transaction between them. Further in cross examination of PW1, it was clearly suggested by the defence that as early as in the year 2000, the accused was entrusted with the management of the Company and during that time, 10 filled cheques and 3 blank cheques were entrusted by the accused to PW1. According to the trial court, these are clear facts and circumstances which would probablise the version of the accused

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Crl.L.P.Nos.179, 180 & 181/17

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regarding the handing over of many blank signed cheques to the complainant. This is to be noted in relation to the crucial fact that even PW2 (who attempted to support the complainant) has deposed that the accused had issued postdated cheques in the year 2006 in favour of PW1. These circumstances were also taken by the trial court as strongly probablising the case of the accused that he had handed over blank signed cheques to the complainant and that the same could have been probably misused by presenting them in the present complaints.

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(F)As already indicated herein above, the trial court found that the complaints were bereft of any details of the transactions which were later sought to be projected by the complainant in his evidence tendered by the trial court. It has been held in the judgment in K.K.Divakaran v. State of Kerala reported in 2016 (4) KLT 233 that suppression of crucial and material facts in a complaint would lead to the throwing out of the complaint and that in such cases the accused is entitled for acquittal. The rationale for the same is that the accused should be told in clear unequivocable terms as to the exact nature of the allegations that he is called upon to defend in a criminal trial and omission to disclose crucial and relevant aspects to the very transactions which led to the alleged liability, would be in

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Crl.L.P.Nos.179, 180 & 181/17

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grave infringement of the constitutional right of an accused to secure fair trial under Section 21 of the Constitution of India. It will be profitable to refer to paragraphs 18 and 20 of the said decision of this Court, which read as follows :

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“ 18. Before she filed the complaint the second respondent sent Exhibit P4 statutory notice to the revision petitioner informing him about the dishonour of the cheque and demanding payment of the amount covered by it. Neither the nature, nor the date of the transaction between the parties nor the date of issuance of the cheque was disclosed in it. There was only a bald statement that the revision petitioner issued a cheque bearing the date 11.1.1999 for Rs.2,55,000/- in discharge of a debt. There is no explanation why these material facts were not disclosed in the statutory notice. Suppression of material facts relating to the alleged transaction in the notice issued before filing the suit or the complaint is an artifice used by certain litigants, the intention of which is very clear. They want to develop a story after knowing the defence that may be set up by the opposite party. The doors of the court should be closed to such fortune seekers.

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19. xxxxxx

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20. In a criminal case the accused should be informed before the trial not only of the nature of the offence but also the particulars of the transaction which are necessary for him to effectively meet the case against him. But unscrupulous complainants refuse to do so with the object of denying the accused a fair trial, which is a right guaranteed under Article 21 of the Constitution. An accused in a complaint case filed under Section 142 of the Act also is entitled to know before the trial the particulars of the accusation against him. Suppression of these particulars in the complaint alone is sufficient to order his acquittal.”

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Therefore, in the light of the legal principles well established by K.K.Divakaran's case(Supra), the trial court is fully justified in castigating

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the complainant for having suppressed crucial and relevant aspects in the complaint. Further this Court is of the view that the other grounds on the basis of which the trial court has acquitted the accused are also matters arrived at on the basis of the materials on record. At any rate, the said factual findings cannot be said to be grossly perverse or

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Crl.L.P.Nos.179, 180 & 181/17

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unreasonable.

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In the case State of Rajasthan v. Darshan Singh @

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Darshan Lal reported in 2012 (4) Supreme 72 = (2012) 5 SCC 789 , the Apex Court has held as follows :

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“24...........In exceptional cases where there are compelling circumstances and the judgment under appeal is found to be perverse, the appellate court can interfere with the order of acquittal. The appellate court should bear in mind the presumption of innocence of the accused and further that the trial court’s acquittal bolsters the presumption of his innocence.”

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Further, in the case Pudhu Raja and another v. State

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reported in ( 2012) 11 SCC 196 = (2013) 1 SCC (Cri.) 430 , the Apex

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Court has held that, “The appellate court can interfere only in exceptional cases where there are compelling circumstances and the judgment in appeal is found to be perverse. The appellate court should bear in mind the presumption of innocence of the accused and further that the trial court’s order of acquittal bolsters the presumption of innocence.”

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Accordingly, this Court is of the view that even if appeals are entertained in these matters, there is no much scope for overturning the considered judgment of acquittal rendered in these cases. Therefore, this Court is not inclined to grant leave in these petitions and the petitions seeking special leave of this Court stand dismissed.

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ALEXANDER THOMAS JUDGE

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csl

K.P.Raveendranath v. K.P.Padmanabha Kurup

Case brief

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K.P.Raveendranath v. K.P.Padmanabha Kurup

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