Partly allowed

M/S.Rich Field Chitties (P) Ltd. v. P.Rajeev

Kerala HC12 Apr 2019CRL.A/1864/2006

Case brief

AI extract

What is this about?

The High Court allowed the criminal appeal against an order of acquittal under Section 138 NI Act. The Court remanded the case to establish that the disputed cheque was issued for a legally dischargeable debt, directing the lower court to examine the account books produced by the respondent.

What did the court decide?

The appeal is partly allowed; the matter is remanded to the court below to afford an opportunity to the appellant to adduce evidence regarding the account books to establish the legally dischargeable

M/S.Rich Field Chitties (P) Ltd. Vs P.Rajeev — Cheque Dishonour | Kerala HC (2019)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MRS. JUSTICE ANNIE JOHN

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FRIDAY, THE 12TH DAY OF APRIL 2019 / 22ND CHAITHRA, 1941

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CRL.A.No. 1864 of 2006

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AGAINST THE JUDGMENT IN ST 740/2003 of JUDICIAL MAGISTRATE OF FIRST CLASS -IV,KOZHIKODE DATED 03-05-2006

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APPLICANT/APPELLANT:

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M/S.RICH FIELD CHITTIES (P) LTD., 33/217, SHUKOOR BUILDING, KANDAMKULAM ROAD, CALICUT, REPRESENTED BY MANAGING DIRECTOR, BY HIS POWER OF ATTORNEY HOLDER, E.M.VELAYUDHAN, S/O.KUTTAN, AREA MANAGER,, MOOKILTHAZHATH HOUSE, PANTHEERANKAVU PO, CALICUT.

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BY ADV. SRI.P.V.KUNHIKRISHNAN

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RESPONDENTS/ACCUSED & STATE:

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1 P.RAJEEV, S/O. ANDIKUTTY, PULPARAMBIL HOUSE, MEDICAL COLLEGE P.O., CALICUT.

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2 STATE OF OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.

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BY ADVS. SRI.ANIL GEORGE SRI.K.B.GANGESH

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SRI. K.B. RAMANAND, PUBLIC PROSECUTOR

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THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 12.04.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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JUDGMENT

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The appellant is the accused in S.T No. 740 of 2003 on the file of the Judicial First Class Magistrate-IV, Kozhikode for an offence punishable under Section 138 of the Negotiable Instruments Act.

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The case of the appellant/complainant is as follows:

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The complainant is a company registered under the Companies Act and is conducting the chitty business. The first respondent/accused was a subscriber of a kuri conducted by the complainant. The accused has prized the chitty before the payment of the instalments and towards the partial payment of the amount due to the company, the accused had issued a cheque for Rs.16672/- dated 09.05.2003 drawn on South Malabar Gramin Bank, Medical College Branch. When the cheque was presented for encashment on 20.05.2003, it was returned due to insufficiency of funds in the account maintained by the accused. Thereafter, the complainant sent a lawyer notice to the accused on 23.05.2003 intimating him about the return of cheque and calling upon him to pay the amount. That notice was returned unclaimed. Accordingly, he has filed the complaint.

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On the side of the appellant/complainant, PW1 was examined and Exts.P1 to P7 were marked. On the side of the defence, DW1 was examined and Ext.D1 was marked. The accused was questioned under

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Section 313 Cr.P.C. He denied all the incriminating circumstances against him.

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The Judicial First Class Magistrate-IV, Kozhikode, as per judgment dated 03.05.2006, found the appellant not guilty of the offence and acquitted under Section 255(1) of Cr.P.C. Aggrieved by the same, this appeal has been filed.

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The learned counsel for the appellant contended that Ext.D1 was produced after examining the complainant, that it was not marked through the complainant and the contents of the same were not even put to the witnesses on the side of the complainant and therefore, Ext.D1 cannot be accepted. Since the signature in the cheque is admitted and handing over of the cheque is admitted, the presumption under Section 118 and 139 of the Negotiable Instruments Act is attracted.

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The Power of Attorney Holder of the complainant company had filed proof affidavit in which he has reiterated the facts as mentioned in the complaint. Ext.P1 is the true extract of the resolution passed in the meeting of the Board of Directors authorising the Managing Director to execute Power of Attorney in the name of PW1 to conduct the case. Ext.P2 is the certified copy of the power of attorney. Ext.P3 is the cheque. Exts.P4 and P5 are the memos issued from the banks. Exts.P6 series are the copy of the lawyer notice and postal receipt. Ext.P7 is the

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returned lawyer notice.

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The first respondent while examined as DW1 has deposed that

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he had cleared the entire liability towards the appellant/complainant. He has produced two pass books issued by the appellant in his favour and it were marked as Ext.D1 series. According to him, he had joined in two chitties conducted by the Company and he had paid altogether Rs.34750/- towards the liability. Therefore, it is admitted by the first respondent that he had joined in two chitties which was being conducted by the appellant company. According to PW1, when the amount became due, the first respondent came to their office, ascertained the actual amount due to the company and issued Ext.P3 cheque for Rs.16,672/towards the entire liability. On verification of Ext.D1, it would show that the first respondent/accused has paid Rs.19,190/- in one chitty and Rs.15,560/- in another chitty. Ext.D1 series show that the chitty sala was Rs.20,000/- each. DW1 deposed that he has got altogether Rs.28,000/- from two chitties. The case of the first respondent is that at the time of disbursement of the amount to him, the officials of the company obtained a blank cheque from him. Subsequently, they have made entries in the cheque without his consent and presented the same. It is very important to note that the appellant company had not disputed the genuineness of Ext.D1 series of passbooks. It is the case of PW1 that he did not get an opportunity to depose before court regarding the

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genuineness of those passbooks. The first respondent has produced Ext.D1 series only after the examination of PW1. So, naturally PW1 could not have obtained an opportunity to challenge Ext.D1 series. It is also to be noted that the learned counsel for the appellant did not put any question to PW1 challenging the genuineness of Ext.D1 series. It is the specific case of the first respondent that all the entries in Ext.D2 were made by the staff of the appellant company. During cross examination, PW1 has admitted that they used to issue passbooks and make entries regarding the payment in those passbooks through their collection agents. Ext.D1 series would show that those passbooks have been verified periodically by the Company, that all the entries in those passbooks were made in one and the same handwriting and that he had paid a total sum of Rs.34,750/- in favour of the company in both the chitties.DW1, at the time of evidence, has stated that he paid that amount in the company and the balance amount was only Rs.5250/-. The counsel for the first respondent had disputed the correctness of the amount shown in Ext.P3 cheque. According to the learned counsel, the appellant company has made all the entries in Ext.P3 cheque without the consent of the first respondent.

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As per Ext.D1 series and from the evidence of PW1, it is clear that the appellant is entitled to get interest at the rate of 18% for the amount due to the appellant. Accordingly, as was admitted by PW1, the

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first respondent is liable to pay Rs.5250/- with interest. But, there is no explanation on the side of the appellant as to how he ascertained the balance amount of Rs.16,372/-.

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From the impugned judgment, it is clear that when the matter was posted for argument, the appellant was directed to produce the detailed statement regarding the balance amount of Rs.16,372/-. But, in reply, the learned counsel for the appellant has stated that they have claimed the actual amount due from the first respondent with interest and incidental charges. But they could not able to establish this fact by producing the details and the appellant has also failed to explain why he has suppressed this fact. He has also not given any evidence as to why he was prevented from furnishing the details and producing the documents to prove the actual amount due from the first respondent. It is proved that the first respondent has paid Rs.34750/- towards the liability and his definite contention is that he is not liable to pay Rs. 16,672/- to the appellant and the appellant company has misused the cheques obtained from him as security at the time of disbursement of the amount and made entries in the cheque without his consent and presented the same. Since the first respondent has dispute regarding the amount due from him, definitely the burden is on the appellant to produce the account books kept by them related to the chitty transaction. But the appellant company was not ready to produce the

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account books. It is the case of the appellant that towards the outstanding amount, the first respondent has executed Ext.P3 cheque. Under these circumstances, it is upto the appellant to establish that Ext.P3 cheque was issued for a legally dischargeable debt; but he has failed to do so. It is a well settled fact that in a case under Section 138 of the Negotiable Instruments Act, the burden is on the accused to rebut the presumtption. In this case, the first respondent has gone to the box and also produced Ext.D1 series to support his arguments and accordingly, he has succeeded in proving the probable case advanced by him. On the other hand, the appellant has failed to establish that the actual amount due from the first respondent was Rs.16,672/- at the time of issuance of Ext.P3 cheque. Accordingly, the court below has held that there is failure on the part of the appellant to establish that Ext.P3 cheque was issued for a legally dischargeable debt.

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At the time of argument, the learned counsel for the appellant has sought for remand of the matter to establish the fact that Ext.P3 cheque was issued for a legally dischargeable debt. It is true that Ext.D1 series of passbooks were produced by the first respondent. PW1 had not obtained an opportunity to challenge the same since it was produced after examination of PW1. Moreover, the definite case of PW1 is that Ext.P3 cheque was issued for the outstanding amount. It is an admitted fact that the first respondent is having an account with the appellant

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company relating to the chitty transaction. If that be so, an opportunity can be given to the appellant to produce the account books kept by them related to the chitty transaction between them and the first respondent, so as to establish that Ext.P3 cheque was issued for the outstanding amount. Only that purpose, the case is remanded to the court below by affording an opportunity to both sides to adduce evidence related to the correctness of the accounts which were kept by the appellant/company. The court below shall dispose of the case after taking evidence on this point alone. Since this case is of 2003, the court below is directed to dispose it of within three months from the date of receipt of this judgment.

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In the result, this appeal is partly allowed and remanded the matter to the court below for giving an opportunity to the appellant/complainant to adduce evidence related to the correctness of the account of the respondent/accused kept by the appellant company. The court below is directed to dispose of the case within three months from the date of receipt of a copy of this judgment.

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sd/- ANNIE JOHN, JUDGE.

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M/S.Rich Field Chitties (P) Ltd. v. P.Rajeev

Case brief

What is this about?

What did the court decide?

M/S.Rich Field Chitties (P) Ltd. v. P.Rajeev

Case brief

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