AI Structured Summary
Not yet generated for this judgment
Judgment
The appellant herein is the complainant in C.C
123/2009 of the Judicial First Class Magistrate''s Court-II,
Alappuzha, and the 1st respondent herein is the accused
therein. The complainant brought the said prosecution
under Section 138 of the Negotiable Instruments Act ( for
short " the N.I. Act "), on the allegation that a cheque for
1,34,391/- executed and issued by the accused in discharge
of the goods purchased by him from the complainant''s
firm happened to be bounced due to insufficiency of funds,
and in spite of statutory notice, the accused failed to make
payment of the cheque amount. The accused appeared
before the trial court, and pleaded not guilty when the
substance of the accusation was read over and explained
to him. The complainant examined PW1 and proved
Exts.P1 to P18 documents. The Ext.X1 specimen
handwritings given by the accused were also marked.
When examined under Section 313 Cr.P.C, the accused
denied the incriminating circumstances, and projected a
defence that he had no transaction with the complainant
firm as alleged in the complaint, at the relevant time, and
that he had not executed the cheque in question in
discharge of any liability. The further defence projected by
him is that the Ext.P1 cheque is in fact the cheque leaf
given by him as a signed blank cheque to one T.G Lal years
back, and the complainant''s wife somehow procured the
said cheque from the wife of T.G Lal after his death, and
brought a false complaint to extract money from him.
However, the accused did not adduce any evidence in
defence.
On an appreciation of the evidence adduced by
the complainant, the trial court found that the complainant
has failed to prove the execution of the cheque in question
and also the transaction, or the liability alleged in the
complaint. Accordingly, the learned Magistrate found the
accused not guilty and acquitted him under Section 255 (1)
Cr.P.C by judgment dated 10.3.2010. Aggrieved by the
judgment of acquittal, the complainant brought this appeal
with the leave this Court.
There is no dispute regarding the fact that the
Ext.P1 cheque was bounced due to insufficiency of funds.
The accused has no case that he had sufficient funds in his
account to honour the cheque, or that it was bounced on
some other ground. He has also no case that he had made
any payment as required in the statutory notice. Thus, the
complainant has proved the compliance of all statutory
requirements for initiating prosecution under Section 138 of
the Negotiable Instruments Act. But the question is whether
the complainant has succeeded in proving the execution of
the cheque in question, and also the transaction involving
the liability, in discharge of which, the cheque was issued.
The learned counsel for the appellant cited a
decision of the Hon''ble Supreme Court in Beena v.
Muniyappan [2001 (3) KLT 950 SC]. The said decision is
regarding the presumptions under Sections 118 and 139 of
the N.I Act. The presumption under Section 118 of the N.I
Act that a negotiable instrument is supported by
consideration, or the presumption under Section 139 of the
N.I Act, that a particular cheque in question was issued in
discharge of a legally enforceable liability, will arise only
when the cheque in question is either admitted, or its
execution is duly proved. In a case where the cheque in
question is not admitted or where its execution is not
proved, the court cannot apply the presumption under
Section 118 or under Section 139 of the N.I. Act. So the
primary question in a case like this must be whether the
complainant has proved the execution of the cheque in
question, when its execution is denied by the accused. This
Court and also the Hon''ble Supreme Court have well settled
that merely because the cheque in question bears the
signature of the accused or just because the signature is
admitted by the accused, the court cannot find execution
against him. Conscious execution of a cheque is a different
matter. When execution is denied by the accused, the
complainant is bound to prove due and conscious execution
of the cheque in question. Once that burden is discharged
by the accused, he can very well avail the presumption
under Sections 118 and also under Section 139 of the N.I
Act.
In a prosecution under Section 138 of the N.I Act,
based on a cheque bounced due to insufficiency of funds, it
is quite fundamental that the complainant must prove a
liability. As part of discharge of initial burden, this liability
which is enforceable in law, must be proved by the
complainant. In this case, the definite case projected by the
accused is that he had no transaction with the complainant
at the relevant time. The accused in this case is being
prosecuted as the Managing Director of a company. The
complaint does not show how exactly or in what capacity
the accused purchased goods from the firm of the
complainant. It is not known whether he purchased the
goods in his personal capacity, or as Managing Director of
the company. Ext.P1 cheque is issued as the authorised
signatory of the company.
To prove the transaction, or to prove that the
accused had business transaction with the complainant''s
firm at the relevant time, the complainant proved Exts.P8 to
P18 documents. All these documents relate to the period
up to July 2008. PW1 admitted in evidence that the goods in
question were purchased by the accused in December,
2008. In short, the complainant''s case must be that the
Ext.P1 cheque was issued in discharge of a liability incurred
in December, 2008. But the documents produced by the
complainant will not prove such a transaction, that the
accused had purchased goods in December 2008 or that he
had incurred any liability in December, 2008. It is pertinent
to note that while marking or proving the Exts.P8 to P18
documents, PW1 did not state that these documents relate
to the transaction with the accused. This very important
aspect was not elicited in his examination. Anyway, when
the transaction stands not proved, it is impossible to find
that the Ext.P1 cheque was issued by the accused in
discharge of a liability.
Now let me see whether the execution of the
cheque is proved in this case. As already observed, mere
admission of signature will not amount to admission of
execution. PW1 is the power of attorney holder of the
complainant firm. An examination of his evidence shows
that he has no idea about the transaction or about the
execution of the cheque in question. He does not know, who
made the entries in the cheque or when exactly the cheque
was executed, or how it was executed.
The defence projected by the accused is that the
Ext.P1 cheque is in fact the signed blank cheque leaf handed
over by him to one T.G Lal years back, and that after the
death of T.G Lal, the complainant''s wife somehow procured
the said cheque from the wife of T.G Lal and brought a false
complaint. The complainant''s wife is admittedly the
Managing Partner of the complainant firm. When this
definite suggestion was put to PW1 in cross-examination, he
just pleaded ignorance. He stated that he does not know
whether Ext.P1 is the cheque leaf somehow procured by his
wife to bring a false complaint. This, to an extent, will
falsify the complainant''s case that the Ext.P1 cheque was
executed by the accused in discharge of a legally
enforceable debt. I find that the complainant has failed to
prove the due and conscious execution of the Ext.P1 cheque.
Once there is failure to prove execution, there is no question
of the complainant being permitted to avail the
presumptions under Section 118 or 139 of the N.I Act . Thus,
I find that the accused was rightly found not guilty by the
trial court.
In the result, this appeal is dismissed.