E.K. Muhammed Kunhi vs P. Ebrahim

M.L. Joseph Francis, J.—The appellant herein is the complainant in C.C. No. 429 of 2000 on the file of the Judicial First Class Magistrate-II, Hosdurg. The complaint was filed against the first respondent alleging commission of offence u/s 138 of the N.I. Act.

The case of the appellant is that in discharge of the amount due to him, the first respondent issued a cheque for Rs. 50,000/-, bearing No. 0062327 dt. 8.3.2000 of Nileshwar Service Co-operative Bank Ltd., Market Road branch, Nileshwar. When the cheque was presented for collection, the same was returned due to insufficiency of funds in the account of the first respondent/accused. A memo to that effect was issued to him on 22.3.2000. He sent a registered lawyer notice to the first respondent on 4.4.2000 calling upon him to pay the amount covered by the cheque, which was received by the accused on 5.4.2000. But the first respondent did not send any reply nor repaid the amount. Hence the complaint was filed and summons was issued to the accused.

The accused appeared before court and pleaded not guilty. Hence trial was proceeded against him. The appellant/complainant was examined as PW1. Exts.P1 to P5 were marked on the side of the complainant. Ext.P1 is the cheque dt. 8.3.2003. Ext.P2 is the memo dt. 22.3.2000 issued by the bank certifying the fact of dishonour. Ext.P3 is the copy of notice dt. 4.4.2000 and Ext.P4 is the acknowledgment card dt. 5.5.2000. The defence put up by the accused was that he had not issued the cheque and the signature in the cheque is not his. Eventhough the case was posted for defence evidence, he had not produced any exhibits or examined any witness.

The learned Magistrate, on considering the evidence, acquitted the accused on the ground that the evidence adduced by the complainant is not sufficient to hold that the accused has committed an offence punishable u/s 138 of the N.I. Act. Against that judgment of acquittal the complainant filed this appeal.

Heard learned Counsel for the appellant and the learned Counsel for the first respondent.

The learned Counsel for the appellant submitted that the court below ought not have acquitted the accused solely on the basis of an isolated statement by the appellant and ought to have appreciated the testimony of PW1 in its entirety. The learned Counsel for the appellant submitted that the court below ought to have found that the initial burden on the appellant was discharged by deposing that the cheque was signed by the accused in his presence.

The learned Counsel for the appellant invited my attention to the decision reported in Dinesh Harakchand Sankla Vs. Kurlon Ltd. and Others, in which it was held that:

Even when the cheque is dishonoured by the reason of "alteration in date and drawer''s signature differs", the Court has to presume by virtue of Section 139 of the negotiable instruments Act that the cheques are received by the holder for the discharge, in whole or in part, of any debt or liability. Of course, this is a rebuttable presumption. The accused alone can show to the Court that the alteration in signature and date were not made because of insufficiency or paucity of funds.

The learned Counsel for the first respondent supported the judgment of the court below and invited my attention to the decision of this Court reported in Bhaskaran Nair v. Mohanan 2009 (2) KLT 897 in which it was held that when the execution of the cheque is denied, the burden is on the complainant to prove that the instrument was duly executed by the maker.

In the trial court, the complainant was examined himself as PW1. He deposed that he had acquaintance with the accused and the accused borrowed Rs. 50,000/- from him on executing Ext.P1 cheque and the accused told him to encash that cheque on 8.3.2000. PW1 deposed that when he presented that cheque for encashment, it was dishonoured due to insufficiency of funds in the account of the accused. Ext.P2 is the dishonour memo issued by the bank dt. 8.3.2000. PW1 sent a lawyer notice to the accused demanding payment of the amount. Ext.P3 is the copy of the lawyer notice and Ext.P4 is the postal acknowledgment signed by the accused showing receipt of the lawyer notice. PW1 deposed that inspite of receipt of the lawyer notice, the accused did not pay any amount and that he has not even sent a reply. In cross examination PW1 deposed that Ext.P1 cheque was signed by the accused in his presence and that he believed that the signature in the cheque is that of the accused. That does not mean that the accused has not signed the cheque in his presence.

When the accused was questioned u/s 313 Cr.P.C., he submitted that he has not issued Ext.P1 cheque and that he did not sign it. Ext.P2 dishonour memo shows that Ext.P1 cheque was dishonoured not due to the reason of ''drawer''s signature differs'', but due to the reason that ''funds insufficient.'' The lower court records would show that the accused filed an application before the Magistrate Court to send Ext.P1 cheque for expert opinion, which was allowed by the learned Magistrate and the accused was directed to deposit the remuneration for the expert and that petition was subsequently dismissed as the accused failed to remit that amount. The complainant sent a lawyer notice and the same was received by the accused, but no reply was given by the accused. Therefore the accused miserably failed to avail the first and best opportunity to set forth his defence and to prevent the complainant from taking legal action if his defence is true. When the complainant was examined as PW1, there was no serious challenge from the side of the accused about the genuineness of the signature of the accused in Ext.P1 cheque.

Therefore, I am of the view that the case of the complainant that the accused issued Ext.P1 cheque on receiving consideration of Rs. 50,000/- can be accepted as true. The accused has not adduced any evidence to rebut the presumption u/s 139 of the N.I. Act. Since the complainant had proved all the necessary ingredients of the offence u/s 138 of the N.I. Act, I find that the accused Crl.A. No. 1987 of 2003 has committed an offence punishable u/s 138 of the N.I. Act and the accused is convicted under that section. Therefore, I find that the learned Magistrate is not justified in acquitting the accused.

The Apex Court in its recent decision reported in Damodar S. Prabhu v. Sayed Babalal H 2010 (2) KHC 428 held that in a case of dishonour of cheques, compensatory aspect of the remedy should be given priority over the punitive aspect. Considering the facts and circumstances of the case, I am of the view that sentencing the accused to pay a fine of Rs. 60,000/-would meet the ends of justice.

In the result this appeal is allowed. The judgment in C.C. No. 429 of 2000 on the file of the Judicial First Class Magistrate -II, Hosdurg in acquitting the accused is set aside and the accused is convicted u/s 138 of the N.I. Act and he is sentenced to pay a fine of Rs. 60,000/- The said fine shall be paid to the appellant as compensation u/s 357(1) of Crl.A. No. 1987 of 2003 Code of Criminal Procedure The accused is permitted either to deposit the fine amount before the court below or directly pay the compensation to the appellant within three months from today and produce a memo to that effect before the court below in case of direct payment. If the accused failed to deposit or pay the said amount within the aforesaid period, he shall suffer S.I. for a period of three months by way of default sentence.