Sajeev Raj vs P.K. Manmadhan Kartha and Another

R. Rajendra Babu, J.—This revision petition is at the instance of the appellant in Crl. A. No. 317 of 1999 before the Sessions Court, Thrissur, who was the accused in S. T. No. 3664 of 1996 before the J. F. C. M. Court, Thrissur. The first respondent filed the complaint against the petitioner alleging the commission of an offence u/s 138 of the Negotiable Instruments Act, 1881 as S.T. No. 3664 of 1996. The trial court found the accused guilty of the above offence and convicted and sentenced him to undergo rigorous imprisonment for three months and to pay a fine of Rs. 90,000. The petitioner challenged the above conviction and sentence before the Sessions Court, Thrissur, in Crl. A. No. 317 of 1999. The appellate court upheld the conviction of the offence u/s 138 of the Negotiable Instruments Act, but modified the sentence. The appellate court imposed a sentence of imprisonment till the rising of the court and directed to pay Rs. 90,000 as compensation u/s 357(3) of the Criminal Procedure Code or, in default, to undergo simple imprisonment for a period of three months. The appellate court further directed to pay Rs. 87,500 from the above compensation amount to the complainant and to credit the balance amount to the State as compensation for the loss incurred by it by way of resources and loss of judicial time spent for resolution of the controversy between the parties. Aggrieved by the above order the petitioner has come up before this court in revision.

Heard learned counsel for the petitioner and the first respondent.

Learned counsel for the petitioner submitted that an offence u/s 138 of the Act was not maintainable as the cheque alleged to have been issued by the petitioner was dishonoured and returned on the ground that the account was closed. It was further submitted that the cheque was not issued in discharge of any debt or liability, but a blank cheque leaf had been forcibly obtained from the petitioner due to threat and coercion and it was not supported by any consideration and hence the findings of the court below are liable to be set aside as perverse. The complaint was filed by one Manmadhan Kartha, the power-of-attorney holder of Sunil Kumar, the complainant. The allegation in the complaint reads :

"2. The accused borrowed money from the complainant for the business purpose of the accused on various times and towards that amount due, the accused issued a cheque dated September 2, 1996, for Rs. 85,000 (rupees eighty five thousand only) bearing No. 070161 drawn on Bank of India, Thrissur Branch, Kerala (Code No. 022/0913) in favour of the complainant.

When the said cheque was presented through Catholic Syrian Bank Ltd., Branch Parapukara, Thrissur, the same was dishonoured by the Bank of India, Branch Thrissur, with endorsement ''account closed''."

The complaint was filed after the issue of a statutory notice and complying with the statutory formalities. The above allegation in the complaint would reveal that the complainant was not having a definite case as to the date or dates during which the complainant had given money to the petitioner. There is a very vague allegation that money had been advanced to the petitioner for his business on various occasions. Further there is no allegation as to the date on which the cheque had been issued though the allegations would indicate that the cheque was a post-dated one. The complainant was not examined, but the power-of-attorney holder alone was examined. When he was examined as P.W.-1, he could not give any details regarding the payment of money by the complainant to the petitioner or relating to the issue of the cheque. Subsequently P.W.-1 was further examined and he stated that the cheque was issued on a date prior to the closure of the petitioner''s account in the bank. It is doubtful how P.W.-1 obtained the above details. Even though very vague allegations were made in the complaint regarding the Consideration for the cheque and also the date of issue of the cheque, the complainant did not appear and give any evidence. The sessions judge in paragraph 8 of the appeal judgment had observed :

"We have the evidence of P.W.-1 about the issue of exhibit P-1 cheque. An anxious perusal of the evidence of P.W.-1 clearly shows that he is not in a position to tender any direct evidence about the circumstances under which exhibit P-1 cheque was issued. It is also true that no convincing explanation is offered other than the recitals in exhibit P-7 about the circumstances under which the payee/complainant has not chosen to appear before the court and has left it on P.W.-1 to tender the evidence about the circumstances under which exhibit P-1 was issued."

The above observation of the appellate court would clearly indicate that the appellate court was not satisfied with the evidence of P.W.-1 regarding the manner in which exhibit P-1 cheque happened to be executed by the petitioner and also the circumstances regarding the payment of money, viz., consideration. Yet reliance was placed on the evidence of P.W.-1 and other witnesses solely on the defects or improbabilities in the defence contention that two blank cheques were issued due to coercion arid compulsion. In fact there is absolutely no evidence to show that exhibit P-1 cheque was supported by consideration except a vague allegation in the complaint and unsupported by any evidence. A careful perusal of exhibit P-1 cheque would reveal that the signature is put by one pen whereas the name of the payee and the amount were written with a different pen. The above circumstance was not considered either by the trial court or by the appellate court. Regarding the evidence let in by a power of attorney holder, this court has observed in Shaji v. Reghunan-danan [1999] 3 KLT SN 82 :

"The permission to appear through a power of attorney is only for prosecuting the complaint and for appearing on his behalf. As regards evidence in the case, the rule is that the best evidence must be let in. If the evidence of the complainant is required for proving any point, the power of attorney cannot substitute him as a proxy and give evidence on his behalf, or speak to matters which are not within his personal knowledge."

The evidence of P.W.-1 would reveal that he had no personal knowledge regarding the execution of the cheque and the other money transactions and his evidence is of no avail for establishing the allegations in the complaint. But the court below, without considering the above aspect, placed undue significance to the weakness or lacuna in the defence contention and found the petitioner guilty as if it is a civil case. The non-issue of a reply notice and the close similarity of the signature found in exhibit P-1 and the acknowledgment card and also the circumstances relating to the issue of the cheque were found against the petitioner though no reliable evidence was there.

The appellate court had placed reliance on a decision of the Supreme Court in NEPC Micon Limited and Others Vs. Magma Leasing Limited, , to hold that the dishonouring of the cheque with the endorsement "account closed" also would come within the category of dishonouring the cheque due to insufficiency of funds in that account. In paragraph 7 of the above decision it was held (page 826) ;

"After issuing the cheque drawn on an account maintained, a person, if he closes ''that account'' apart from the fact that it may amount to another offence, it would certainly be an offence u/s 138 as there was insufficient or no fund to honour the cheque in ''that account''."

In fact, the above decision applies only to cases where accounts are closed after the issue of the cheque. In the present case there is absolutely no evidence to show that the cheques had been issued prior to the closure of the accounts. On the other hand, the definite case put forward by learned counsel for the petitioner was that the cheque was issued after the closure of the accounts out of pressure and coercion. The appellate court further observed that the petitioner had not taken any steps for intimating the bank to stop payment and that circumstance also was relied against him. But when once the account was closed and subsequently a cheque had been issued, there is no necessity to inform the bank to stop payment as there is no possibility of encashing the cheque due to the non-existence of the account. Hence the above argument advanced by learned counsel for the first respondent also cannot be accepted. P.Ws.-2 and 3 are two bank managers and their evidence do not improve the case of the complainant regarding the above aspects. Hence the finding of the courts below are perverse and the conviction and sentence passed against the petitioner are liable to be set aside.

In the result this revision petition is allowed. The conviction and sentence passed against the petitioner are set aside and the petitioner is acquitted.