Allowed

Sajimon.P.P v. M/S.Konchery International

Kerala HC14 Jul 2023CRL.A/527/2015

Case brief

AI extract

What is this about?

The Kerala High Court allowed an appeal against an acquittal in a cheque bounce case. The trial court had acquitted the accused for failing to prove the transaction and cheque execution. The High Court held that once the signature on the cheque is established, the presumption under Section 139 applies, shifting the burden to the accused. The court also held that prosecuting partners without the fi

What did the court decide?

Impugned judgment set aside; Respondents 2 and 3 found guilty of Section 138 NI Act; sentenced to one day simple imprisonment and fined Rs. 6,00,000.

Sajimon.P.P Vs M/S.Konchery International — Cheque Dishonour | Kerala HC (2023)

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Crl.A.527/2015

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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 V.G.ARUN

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FRIDAY, THE 14^TH DAY OF JULY 2023 / 23RD ASHADHA, 1945

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CRL.A NO. 527 OF 2015

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AGAINST THE ORDER/JUDGMENT in CC 404/2009 OF CHIEF JUDICIAL MAGISTRATE, ALAPPUZHA

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Crl.L.P 91/2015 OF HIGH COURT OF KERALA

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APPELLANT/COMPLAINANT:

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SAJIMON.P.P AGED 45 YEARS S/O.PRABHAKARAN, CHOLLAMPARAMBU HOUSE, KALAVOOR PO, ALAPPUZHA.

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BY ADVS. A.S.DILEEP SRI.SAJEN THAMPAN P.BINOD(K/647/1987) SUSEELA DILEEP(S-1307) K.Y.SUDHEENDRAN(K/000625/1987) SUDEEP ARAVIND PANICKER(K/000517/2018)

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RESPONDENTS/ACCUSED & STATE:

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1 M/S.KONCHERY INTERNATIONAL, MAYITHARA MARKET PO, CHERTHALA, ALAPPUZHA DISTRICT, PIN-688 539.

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2 SANJIVE K.S., PARTNER, M/S.KONCHERY INTERNATIONALMAYITHARA MARKET PO, CHERTHALA, ALAPPUZHA DISTRICT, PIN-688 539.

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3 SHIBU K.S., PARTNER, M/S.KONCHERY INTERNATIONALMAYITHARA MARKET PO, CHERTHALA, ALAPPUZHA DISTRICT, PIN-688 539. 4 STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR,HIGH COURT OF KERALA, ERNAKULAM.

BY ADV R.RAMESH

OTHER PRESENT:

Crl.A.527/2015

PP M.C.ASHI

THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 26.06.2023, THE COURT ON 14/7/2023 DELIVERED THE FOLLOWING:

Crl.A.527/2015

V.G.ARUN J.

Crl.A.No.527 of 2015

Dated this the 14^th day of July 2023

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JUDGMENT

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The appellant is the complainant in CC No.404/2009 of the Chief Judicial Magistrate's Court, Alappuzha. The complaint was filed alleging commission of offence under Section 138 of the Negotiable Instruments Act by respondents 1 to 3. The allegation in the complaint was that, respondents 2 and 3, in their capacity as partners of the first respondent firm, borrowed Rs.4,00,000/- from the appellant and issued Exts.P1 and P1(A) cheques for Rs.2 Lakhs each towards discharge of the liability. The cheques, on presentation, were dishonoured for insufficiency of funds. Although demand notices were issued, respondents 1 to 3 failed to pay the amount.

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In order to prove his case, the appellant got himself examined as PW1 and marked Exts.P1 to P5(a) documents. The defence evidence consisted of the oral testimony of DW1, a person claiming to be the Managing Partner of the first respondent firm. By the impugned judgment, trial court acquitted respondents 1 to 3 under Section 255(1) of Cr.P.C, finding the appellant to have

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Crl.A.527/2015

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failed in adducing evidence to prove the transaction and payment of money to the second and third respondents. The trial court also found the appellant to have failed in proving the execution of the cheque.

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Learned Counsel for the appellant contended that the findings of the trial court are based on misappreciation of evidence and misunderstanding of law. The finding regarding non-mentioning of the details of the transaction in the complaint or proof affidavit, is assailed by drawing attention to the details stated in paragraph 3 of the complaint. The finding that execution of the cheque was not proved, the interested oral testimony of the complainant alone being available, is assailed on the ground that, once issuance of cheque and affixing of signature is admitted, presumption under Section 139 of the Negotiable Instruments Act will get attracted and burden is on the accused to rebut that presumption. The decisions of the Apex Court in Kalamani Tex(M/s.) and Another v. P.Balasubramanian ( 2021 (5) SCC 283) and Rohitbhai Jivanlal Patel v. State of Gujarat (2019 (1) KLT OnLine 31119(SC ) are pressed into service in support of the argument. It is contended that the trial court committed another gross mistake by finding that, absence of notice to DW1, the Managing Partner of the first respondent, rendered the complaint unsustainable.

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Crl.A.527/2015

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The contentions of respondents 1 to 3 could not be heard, since their Counsel is absent.

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As rightly contended by the Counsel for the appellant, details regarding the transaction and issuance of cheques is stated in the complaint. It is averred in the complaint that, accused 2 and 3 are partners of the first accused firm and are managing its dayto-day business and dealing with all financial transactions jointly. It is stated that the complainant and accused 2 and 3 are close friends and were having financial transactions for many years. For convenience, paragraph 3 of the complaint is extracted hereunder;

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“3. While so for the business need, the accused partners of M/s.Koncherry International, Mayithara Market PO, Cherthala, jointly borrowed an amount of Rs.4,00,000/-(Rupees four lakh) from the complainant and towards the consideration accused jointly issued two cheques for Rs.2,00,000/-(Rupees two Lakh) each for the said amount of Rs.4,00,000/(Rupees four lakh) one cheque bearing No.267668 dated 28/8/2008 and another cheque bearing No.267689 dated 12/1/2009 of the State Bank of Travancore SME Branch Vazhicherry, Alappuzha in favour of the complainant. “

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Crl.A.527/2015

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Surprisingly, despite the accused not denying issuance of the cheque or their signatures therein, the trial court proceeded to hold that execution of the cheques is not proved. As held in Kalamani Tex (supra), once signature of the accused is established, the reverse onus clause becomes operative and the obligation to discharge the presumption under Section 139 shifts upon the accused. Going by the dictum in Bir Singh v. Mukesh Kumar[2019 (1) KLT 598], once presumption under Sections 118 and 139 is drawn, factors like want of documentary evidence in the form of receipts or accounts or source of funds are no longer relevant considerations.

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The finding that DW1 being the Managing Partner of the first accused firm, the complaint filed without making DW1 as accused, is not maintainable and cannot also be sustained, since the conclusion that DW1 is the Managing Partner of the firm is not supported by any material. The above finding is also wrong for the reason that respondents 2 and 3 had issued the cheques in their capacity as authorised signatories of the firm. In T. Stanes & Co.Ltd. v. A.Jaffarullah [2001 (10) SCC 78] , the Supreme Court has held that the partner of firm can be prosecuted for the offence under Section 138, without prosecuting the firm.

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Crl.A.527/2015

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For the aforementioned reasons, the impugned judgment is set aside. Respondents 2 and 3 are found guilty of the offence under Section 138 of the NI Act and sentenced to simple imprisonment for a day, till rising of the court, and fine of Rs. 6,00,000/-(Rupees Six Lakhs only). In case of failure to deposit the fine, respondents 2 and 3 shall undergo simple imprisonment for three months. The fine, if remitted or realised, shall be paid to the appellant as compensation under Section 357(1) Cr.P.C.

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Crl.Appeal is allowed.

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Sd/-

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V.G.ARUN JUDGE

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dpk

Sajimon.P.P v. M/S.Konchery International

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Sajimon.P.P v. M/S.Konchery International

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