Justin P. vs Sree Gokulam Chits and Finance Co. (P)

V.K. Mohanan, J.—The accused in a prosecution for the offence u/s 138 of the Negotiable Instruments Act, 1881 (for short ''the N.I. Act'') approached this Court by preferring the above revision petition challenging his conviction and sentence, imposed as per judgments of the trial court as well as the lower appellate court.

The case of the complainant is that, the accused is a subscriber of the chitty conducted by the complainant and he prized the chitty and received the chitty amount and in discharge of his liability of Rs. 65,291/-, he issued Ext. P2 cheque dated 28.8.2006 for the said amount, which when presented for encashment dishonoured, as there was no sufficient fund in the account maintained by the accused and the cheque amount was not repaid inspite of a formal demand notice and thus the revision petitioner has committed the offence punishable u/s. 138 of Negotiable Instruments Act. With the said allegation, the complainant approached the Chief Judl. Magistrate Court-Kollam, by filing a formal complaint, upon which cognizance was taken u/s. 138 of Negotiable Instruments Act and instituted ST. No. 890/06. During the course of the trial PW1 was examined from the side of the complainant and Exts. P1 to P7 were produced and marked. From the side of the defence, the accused himself was mounted to the box and gave evidence as DW1 and produced Exts. D1 to D5 documents. On the basis of the available materials and evidence on record, the trial court has found that the cheque in question was issued by the revision petitioner/accused for the purpose of discharging his debt due to the complainant. Thus accordingly the court found that, the complainant has established the case against the accused/revision petitioner and consequently found that the accused is guilty and thus convicted him u/s. 138 of Negotiable Instruments Act. On conviction, the trial court sentenced the revision petitioner to undergo simple imprisonment for 3 months.

Challenging the above conviction and sentence the accused preferred an appeal and by judgment dated 20.10.2009 in Crl. A. 346/08 the appellate court confirmed the conviction but the sentence imposed by the court below is set aside and instead of that, the accused is sentenced to pay a fine of Rs. 65,300/- and in default he is directed to undergo simple imprisonment for two months. It is also ordered that, if the fine amount is realised the same shall be paid to the complainant as compensation u/s. 357(1)(b) of Cr.P.C. It is the above conviction and sentence challenged in this revision petition.

The learned counsel for the revision petitioner vehemently submitted that the complainant has miserably failed to establish the allegation against the accused including the execution and issuance of cheque and passing over of the consideration. The learned counsel submitted that, by producing the defence evidence, the accused has effectively rebutted the presumption and therefore the trial court as well as the appellate court committed wrong in convicting the revision petitioner. According to the learned counsel, the complainant has not produced any evidence to show the liability of the revision petitioner and therefore the amount shown in Ext. P2 cheque is not actually due to the complainant. According to the learned counsel, as per Ext. D4 document the defence had established that, he had already deposited a sum of Rs. 40,100/- and out of the chitty amount ie., a sum of Rs. 75,000/-, the actual balance amount to be paid is only near about Rs. 35,000/-. Therefore, according to the learned counsel in the absence of any proof including any documentary evidence regarding the liability of the accused, it can not be said that the cheque in question is with respect to any liability due to the complainant from the accused. In support of the above submission, the learned counsel very much placed reliance upon the decision reported in Shaji v. Ignatious, (2009 (2) KLT 491), Jose Vs. P.C. Joy, and Krishna Janardhanan Bhat v. Dattatraya Hegde, 2008 (1) R.C.R. (Criminal) 695 : 2008 (1) R.C.R. (Civil) 498 : 2008 (1) (R.A.J.) 279 : (2008 (1) KLT 425).

I have carefully considered the arguments advanced by the learned counsel for the revision petitioner and I have perused the judgments of the courts below and gone through the decisions cited.

It is an admitted fact that the complainant is a chitty company and the revision petitioner/accused was one of the subscribers of the complainant- company. It is also beyond dispute that the chitty was prized in favour of the accused and he had availed the chitty amount for Rs. 74,688/-in a lump sum, in the month of May, 2005. According to the complainant, though the chitty in question started in July 2004, the accused has remitted the subscription till March 2006 but after that, there was default in paying the amount. The defence has also no claim that he had deposited the entire liability. The accused has produced Ext. D1, from which it can be seen that he had paid only a sum of Rs. 41,100/-, According to the defence, when he prized the chitty, he issued a blank signed cheque in favour of the complainant and the same is misused by the complainant, and produced as Ext. P2 in this case. The trial court as well as the appellate court have concurrently found that the cheque in question was issued by the accused towards the discharge of the liability that due to the complainant out of the chitty transaction. The complainant has adduced its evidence through PW1 and by producing Exts. P1 to P7. According to the complainant, when the amount was due, the revision petitioner went to the office of the complainant/company and settled the account and after settling the account in August 2006, the accused issued Ext. P2 cheque, which when presented for encashment dishonoured for want of sufficient funds in the account maintained by the accused. Though PW1 was cross examined, nothing brought on record to discredit his version. There is no effective challenge against the deposition of PW1 regarding the amount quantified and shown in Ext. P2 cheque, towards the liability out of the chitty transaction.

Ofcourse, the rights and liabilities of the parties are covered by the terms of the contract connected with the chitty transaction and when the accused issued blank cheque, he authorised the complainant to fill up the same and to realise the liability from the subscriber/the accused, in case of any default. This court, atleast in two decisions reported in M/s. General Auto Sales Vs. Vijalakshmi D., , Moideen v. Johny, 2006 (4) R.C.R. (Criminal) 566 : (2006 (3) KLT SN 62 case No. 85), has held that "even if the blank cheque is issued as a security, the person in possession of the blank cheque to enter the amount of liability and present it to the bank". In the light of the above decisions, I am of the view that, Ext. P2 cheque was issued by the accused towards the discharge of the liability due to the complainant that arose out of the chitty transaction between the complainant and the accused. Though the learned counsel for the revision petitioner has cited the decisions which mentioned above, the facts and circumstances involved in those cases are entirely different from the present one, hence the dictum laid down in those decisions are not applicable in the present case.

It is also relevant to note that, the accused/revision petitioner has already admitted the chitty transaction with the complainant and availing of the chitty amount. The defence has not adduced any evidence to show that he has discharged all the liabilities. In the light of the above admitted facts, I am of the view that, the burden is on the accused to show that no liability is due to the complainant. When the chitty transaction is admitted and when there is no claim that he had discharged the liability out of the chitty transaction, it can not be held that he had succeeded in rebutting the presumption, which is in favour of the complainant u/s. 139 of the Negotiable Instruments Act. Therefore, I find no reason to interfere with the order of conviction and sentence imposed by the courts below.

It is relevant to note that, though the trial court has imposed only a sentence of simple imprisonment for 3 months, in appeal the appellate court has set aside the sentence of imprisonment and imposed sentence of fine, directing the revision petitioner to pay a sum of Rs. 65,300/- with a default sentence of simple imprisonment for 2 months. As the sentence imposed by the appellate court is just and reasonable, I find no reason to interfere with the same but the revision petitioner is granted two months time to deposit the fine amount and it is made clear that the default sentence fixed by the appellate court will be attracted only in case of failure on the part of the revision petitioner in depositing the fine amount within the above time limit. If there is any failure on the part of the revision petitioner in depositing the fine amount within 2 months from today i.e., on or before 7.3.2011, the trial court is free to take coercive steps to execute the sentence and for realisation of the fine amount. The execution of warrant if any, pending against the revision petitioner shall be deferred till 7.3.2011. Criminal revision petition is disposed of accordingly.