Allowed

P.M.Moidu v. K.M.Abdulla and State

Kerala HC11 Dec 2023Crl.Rev.Pet/4017/2009

Case brief

AI extract

What is this about?

High Court set aside conviction under Section 138 NI Act against accused who issued a cheque from a closed account years ago. Court held complainant failed to prove legally enforceable debt to rebut statutory presumptions involving lost blank cheques.

What did the court decide?

Conviction and sentence set aside; petitioner found not guilty, acquitted, bail bond cancelled, and set at liberty.

P.M.Moidu Vs K.M.Abdulla and State — Cheque Dishonour | Kerala HC (2023)

¶1

 IN THE HIGH COURT OF KERALA AT ERNAKULAM
 PRESENT

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 THE HONOURABLE MRS. JUSTICE SOPHY THOMAS
 MONDAY, THE 11 TH DAY OF DECEMBER 2023 / 20TH AGRAHAYANA,
 1945
 CRL.REV.PET NO. 4017 OF 2009

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 AGAINST THE JUDGMENT DATED 17.11.2009 IN CRL.APPEAL
 NO.275/2008 OF SESSIONS COURT, KASARAGOD

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 CC 44/2008 OF JUDICIAL FIRST CLASS MAGISTRATE-II
 (ADDITIONAL MUNSIFF), KASARAGOD

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REVISION PETITIONER/APPELLANT/ACCUSED:

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 P.M.MOIDU, S/O.MAMMMUNHI,
 R/AT BADRIYA NAGAR, PERAVAD ROAD, KUMBALA POST, KASARAGOD.

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 BY ADVS.

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 SRI.T.B.SHAJIMON
 SMT.GOVINDU P.RENUKADEVI

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 RESPONDENTS/COMPLAINANT/STATE:

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1 K.M.ABDULLA, S/O.MOHAMMED, KANATHIL HOUSE, CHENGALA POST, KASARAGOD.

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

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 R1 BY ADV SRI.P.K.MUHAMMED

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R2 BY SMT.NIMA JACOB, PUBLIC PROSECUTOR

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 THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY
 HEARD ON 11.12.2023, THE COURT ON THE SAME DAY DELIVERED
 THE FOLLOWING:

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Crl.R.P No.4017 of 2009 2

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“CR”

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O R D E R

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This revision is at the instance of the accused in C.C.No.44 of 2008 on the file of Judicial First Class Magistrate-II (Additional Munsiff), Kasaragod, assailing the judgment in Crl.Appeal No.275 of 2008 on the file of Sessions Court, Kasaragod, which upheld his conviction under Section 138 of the Negotiable Instruments Act (hereinafter referred as ‘the NI Act’), though the substantive sentence was reduced to simple imprisonment for one month, while retaining the compensation part and its default sentence.

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C.C.No.44 of 2008 was based on a private complaint filed by the complainant/1st respondent, alleging dishonour of Ext.P1 cheque dated 29.08.2007 alleged to have been issued by the revision petitioner towards discharge of an amount of Rs.96,000/-. He presented the cheque for collection. But it was returned dishonoured stating reason “payment stopped by the drawer and account closed”. The complainant/1st respondent sent lawyer notice to the revision petitioner, to which he sent a reply, but no amount was paid. So he preferred the complaint under Section 138 of the NI Act.

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Crl.R.P No.4017 of 2009 3

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On appearance of the revision petitioner before the trial

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court, particulars of offence was read over and explained, to which he pleaded not guilty. Thereupon PWs 1 and 2 were examined and Exts.P1 to P7 were marked by the complainant/1st respondent. On closure of evidence, the revision petitioner was questioned under Section 313 of Cr.P.C. He denied all the incriminating circumstances brought on record, and stated that he was having acquaintance with the complainant/1st respondent for about 15 years, and the complainant used to visit his house. In the year 1997, he lost his cheque book and Ext.P1 cheque bearing No.2249 is one among the cheque leaves in the cheque book lost. Immediately, he informed the bank and gave a stop payment letter, and the account was closed in the year 1997 itself. From the cheque book lost, except Ext.P1 cheque, no other cheques were seen presented by anybody before the bank so far. He came to know about possession of Ext.P1 cheque by the complainant only when he received the lawyer notice. That cheque was never issued towards discharge of any legally enforceable debt, and he never filled up that cheque in favour of the 1st respondent/complainant.

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Crl.R.P No.4017 of 2009 4

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DW1 was examined and Ext.D1 reply notice was marked, as defence evidence from the part of the revision petitioner.

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On appreciating the facts and evidence and on hearing the rival contentions, the trial court found the revision petitioner guilty under Section 138 of the NI Act and he was convicted and sentenced to undergo simple imprisonment for three months and to pay compensation of Rs.96,000/- with a default sentence of simple imprisonment for a further period of one month.

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Aggrieved by the conviction and sentence, the revision petitioner filed Crl.Appeal No.275 of 2008, and the appellate court, on reappreciation of the facts and evidence, found that there was no reason to interfere with the conviction under Section 138 of the NI Act and upheld the same. But the substantive sentence was modified and reduced to simple imprisonment for one month, without altering the compensation part and its default sentence.

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Now this Court is called upon to verify the legality, propriety and correctness of the impugned judgment of conviction and sentence imposed on the revision petitioner.

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Heard learned counsel for the revision petitioner and

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Crl.R.P No.4017 of 2009 5

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learned counsel for the 1st respondent.

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The main contention taken up by learned counsel for the revision petitioner is that there was no transaction between the revision petitioner and the 1st respondent, and Ext.P1 cheque was not supported by any consideration. There was no legally enforceable debt due from him, towards the 1st respondent/complainant. In order to substantiate that fact, learned counsel for the revision petitioner drew the attention of this Court to the averments in the complaint. The complaint starts with the sentence ‘That to discharge the legally enforceable debt due to the complainant, the accused has issued a cheque bearing No.2249 dated 29.08.2007 drawn on Ednad-Kannur Service Co-operative Bank Ltd., P.O. Ednad, Kasaragod District, for Rs.96,000/- in favour of the complainant at his residence in the above mentioned address.’ There is no mention about any transaction between them, so as to give Rs.96,000/- to the revision petitioner or to issue the cheque in return. It is not even stated that the revision petitioner borrowed that amount as a hand loan, on such and such date, and towards discharge of that debt, the said cheque was issued.

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Crl.R.P No.4017 of 2009 6

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The definite case of the revision petitioner is that he lost his cheque book containing 9 cheque leaves in the year 1997, and immediately on knowing about the loss, he issued Ext.P7 letter to the bank to close his account. In that letter, it is categorically stated that the cheque book issued to him is found irrecoverably lost, and so it was not possible for him to surrender the cheque book, while closing the bank account. PW2, the Secretary of Ednad-Kannur Service Co-operative Bank Ltd. deposed that the account of the revision petitioner in that bank was closed on 22.12.1997. Ext.P1 cheque is dated 29.08.2007, i.e., after about ten years of closing the bank account. Learned counsel for the 1st respondent/complainant contended that since the revision petitioner deliberately closed the account and issued the cheque, an offence under Section 138 of the NI Act will be attracted. Learned counsel for the revision petitioner pointed out that the 1st respondent/complainant had filed CMP No.827 of 2008 in C.C.No.44 of 2008 for converting the complaint into one under Section 420 of IPC, but that was rejected by the trial court.

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In order to attract an offence punishable under Section

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Crl.R.P No.4017 of 2009 7

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138 of the NI Act, it should have been drawn by a person, on an account maintained by him. Learned counsel for the revision petitioner would argue that the account must have been a subsisting account either on the date on which the cheque was issued or on the date which the cheque was bearing or at the time when the cheque was presented for encashment. She relied on the decisions Joseph v. Philip Joseph [2000 (2) KLJ 679] and Japahari v. Priya [1993 (2) KLT 141] to fortify her argument. But a Division Bench of this Court in Vathsan v. Japahari [2003 (3) KLT 972] declared the law that ‘where cheques have been issued against an account, which has been closed prior to the date of drawal of the cheque, it shall also come within the fold of Section 138 of the NI Act, to attract criminal liability’ and the dictum in Joseph’s case and Japahari’s case cited (Supra) was found no more good law.

¶37

Following the dictum in Vathsan’s case cited (Supra), a Single Bench of this Court in Salim v. Thomas [2004 (1) KLT 816] held that even if a cheque was drawn against an account which has been closed prior to the drawal of the cheque, it comes within the fold of Section 138 of the NI Act. Once a person issues

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Crl.R.P No.4017 of 2009 8

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a cheque drawn on an account, which he was maintaining with the Bank , he cannot take up a defence that he did not have a subsisting account, on the date of drawal of the cheque, as it will undoubtedly defeat the intent behind Section 140 of the NI Act. It was further held that, cheque issued after the date of closure of the account, also falls within the sweep of Section 138 of the NI Act, and the expression, an account maintained by him takes in, an account that was maintained by him and also an account that is maintained by him. Otherwise a mischievous account holder if he retains a cheque leaf even after closure of the account to defraud an honest payee, will get out of the net cast by Section 138 of the NI Act.

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In the case on hand, the account was closed on 22.12.1997 and the cheque was drawn after ten years. This Court cannot appreciate the case of the 1st respondent/ complainant that, only to cheat him, the revision petitioner issued Ext.P1 cheque from his closed account. As normally no man will close his account, anticipating that, after ten years, he may issue a cheque from his closed account, in order to cheat somebody.

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Crl.R.P No.4017 of 2009 9

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The case of the revision petitioner is that he was

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conducting bus service, and he used to keep signed self cheques to take money for his business purposes. His cheque book was stolen by somebody and Ext.P1 cheque produced by the complainant/1st respondent is one among those cheques in the cheque book lost. On going through Ext.P1 cheque, it could be seen that the signature of the revision petitioner, which he admitted in the witness box, is entirely different from the signature seen towards the scoring of “self” on the top of the cheque leaf. The handwriting and the ink used are also different. So it substantiates the case of the revision petitioner that he used to keep signed blank cheque leaves for the use of his transport business, and when he found that the cheque book was lost, immediately he gave Ext.P7 letter to the bank, and his account was closed. So there was no probability for the revision petitioner to issue Ext.P1 cheque to the complainant/1st respondent in the year 2007, especially when no transaction whatsoever has been shown for issuing the cheque. The complainant/1st respondent has not stated the source of that money also. Moreover, he deposed that the revision petitioner

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Crl.R.P No.4017 of 2009 10

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borrowed the amount at his house, and the cheque also was handed over to him, at his house. But nobody from the house of the complainant/1st respondent was examined to support his case. So, for that reason also, the case put forward by the complainant/1st respondent is not inspiring confidence of the court.

¶46

True that the complainant/1st respondent will get the aid of presumption under Sections 118 and 139 of the NI Act. But the presumption will be there, unless the contrary has been proved. Here, Ext.P7 letter addressed by the revision petitioner to the bank and Ext.P8 ledger extract of the revision petitioner in the drawee bank clearly show that on 22.12.1997 his bank account was closed and there was specific averment in that letter, that he had lost his cheque book. Ext.P8 ledger extract substantiates the case of the revision petitioner that he had lost the cheque book bearing cheque Nos.2242 to 2250, and the entry dated 23.12.1997 specifically mentions that fact. Ext.P1 cheque is bearing No.2249. The missing of cheque No.2249 was recorded in the bank records in the year 1997 itself, and so the case of the complainant/1st respondent that the said cheque was

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Crl.R.P No.4017 of 2009 11

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issued by the revision petitioner on 29.08.2007 towards discharge of Rs.96,000/- is liable to be rejected.

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When examined before court, PW1 complainant/1st respondent stated that the revision petitioner issued Ext.P1 cheque as a self cheque and when he presented it before the bank, the bank officials advised him to get it, in his own name from the drawer, and accordingly he approached the revision petitioner and he scored the writing “self” and wrote the name of the complainant and countersigned that scoring. Obviously, that scoring and writing of name of the complainant in the cheque happened even prior to the presentation of the cheque before the bank for collection. But that fact is not pleaded by the complainant anywhere in his complaint. That fact substantiates the case of the revision petitioner that he was in the habit of keeping signed self cheques for his business purposes, and Ext.P1 was one of such cheques lost from his possession. So the only possible conclusion is that the self cheque signed by the revision petitioner was misused by the complainant, by writing his own name after scoring the writing “self”.

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Crl.R.P No.4017 of 2009 12

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In the case on hand, the cheque in question was issued on 29.08.2007. The account was closed as early as on 22.12.1997. Going by the decision Vathsan’s case and Salim’s case cited (Supra) a cheque issued even after the date of closure of the account can fall within the sweep of Section 138 of the NI Act. But in order to attract an offence under Section 138 of the NI Act, the cheque must represent a legally enforceable debt. In the present case, as we have seen, the transaction in which the amount became due to the 1st respondent/complainant, the source of money etc. are not all proved by the complainant/1st respondent. Whereas, sufficient evidence was there indicating the fact that the revision petitioner was in the habit of keeping signed self cheques for the purpose of his business and in the year 1997 when he lost his cheque book, he immediately informed the bank and closed his bank account. The fact that Ext.P1 cheque is of the year 2007 i.e., after 10 years of closing the bank account makes the case of the 1st respondent/ complainant doubtful.

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18. In Bhaskaran Nair v. Mohanan [2009 (2) KLT

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897] , this Court held that when execution is denied, the burden

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is on the complainant to prove that the instrument was duly executed by the maker. Here, even from the date of reply notice, the definite case of the revision petitioner was that he had no financial transaction at all with the complainant and the cheque relied on by him was one of the cheques lost from his possession. Even then, the complainant did not take any steps to prove the transaction between them, by which Rs.96,000/- became due to him from the revision petitioner. The decision Bhaskaran Nair’s case cited (Supra) further says that where the materials produced disclose of suspicious circumstances surrounding the transaction and if no satisfactory explanation is tendered by the holder of the instrument to that effect, no conviction is legally permissible solely banking upon the statutory presumptions. A court is expected to examine whether the transaction covered by the cheque is genuine and bona fide . Here, the 1st respondent/complainant failed to prove a genuine transaction leading to the issuance of Ext.P1 cheque.

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From the foregoing discussion, this Court has no hesitation to hold that the 1st respondent/complainant failed to bring home an offence punishable under Section 138 of the NI

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Act, and the revision petitioner succeeded in rebutting the statutory presumptions available in favour of the complainant/1st respondent under Sections 118 and 139 of the NI Act. So the conviction and sentence imposed on the revision petitioner by the trial court as well as the appellate court are liable to be set aside.

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In the result, the revision petitioner is found not guilty of the offence punishable under Section 138 of the NI Act and he is acquitted thereunder. His bail bond is cancelled and he is set at liberty forthwith.

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This revision petition accordingly stands allowed.

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Sd/-

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SOPHY THOMAS, JUDGE

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DSV/-

P.M.Moidu v. K.M.Abdulla and State

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P.M.Moidu v. K.M.Abdulla and State

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