IMPORTANT POINT
A cheque issued as a guarantor for a loan is presumed to be in discharge of a debt under Section 139 of the Negotiable Instruments Act, and evasion of notice constitutes effective service.

ORDER :

1. Revision Petitioner is the accused in S.T. No. 4012/2013 on the files of Judicial First Class Magistrate Court, Ottappalam and he is the appellant in Crl. Appeal No. 404/2014 of Sessions Court, Palakkad. In this revision, he assails the judgment of conviction and order of sentence against him for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short ‘N.I. Act’)

2. The parties shall be referred to as complainant and accused as shown in S.T. No. 4012/2013.

3. The case of the complainant ‘Muthoot Leasing and Finance Ltd.’ is that on 06.04.2006, the accused stood as a guarantor for a vehicle loan of Rs. 3,78,000/- availed by his brother Aneesh from its branch at Palakkad and issued postdated cheques for the repayment of the loan in monthly instalments. But the said cheques issued by the accused were dishonoured one by one. When the complainant intimated the said fact to the accused, he issued Ext.P2 cheque dated 07.02.2009, for an amount of Rs. 3,90,000/- drawn on Canara Bank, Ottappalam branch, towards repayment of the balance loan amount with interest. Though the complainant presented Ext.P2 cheque for encashment, it was also bounced stating the reason ‘no such account’. Though the complainant caused to issue notice to the accused intimating the factum of dishonour of cheque and demanding the amount covered by the cheque, accused purposely evaded the notice. Accused failed to pay the amount covered by Ext.P2 cheque and thereby committed the offence punishable under Section 138 N.I Act.

4. Accused denied the liability to pay any amount to the complainant and also denied the issuance of Ext.P2 cheque to the complainant.

5. Evidence consists of the oral testimonies of PW1 and PW2 and documents marked as Ext.P1 to Ext.P17. No defence evidence was adduced on the side of the accused.

6. After trial, the learned Magistrate found the accused guilty of the offence punishable under Section 138 of the N.I. Act and he was sentenced to undergo simple imprisonment for a period of 3 months and to pay compensation of Rs. 3,90,000/- to the complainant under Section 357(3) Cr.P.C. in default of which to undergo simple imprisonment for a further period of 3 months. In appeal filed by the accused as Crl. Appeal No. 404/2014, his conviction was confirmed but the order of sentence was modified and he was sentenced to imprisonment till the rising of court, and to pay a fine of Rs. 3,90,000/- and in default of payment of fine to undergo simple imprisonment for 3 months. It was further ordered that, on realization of the fine amount, the same shall be given to the complainant as compensation under Section 357(1)(b) Cr.P.C.

7. The point for consideration in this revision is whether the impugned judgment of conviction and sentence needs any interference by this Court.

8. Though the accused would contend that, he has not issued Ext.P2 cheque to the complainant institution, the evidence tendered by PW2 who was the Manager of Canara Bank, Ottappalam would show that accused was maintaining an account in the said bank as Account No. SB34975. Ext.P16 is the copy of cheque book issue register. The evidence on record would show that Ext.P2 is a cheque drawn in the said account of the accused. Therefore, the case of the accused that, he did not issue Ext.P2 cheque and he has no connection with Ext.P2 cheque is untenable.

9. The next aspect for consideration is whether the accused issued Ext.P2 cheque to the complainant in discharge of a legally enforceable debt or liability.

10. PW1 who was the Senior Business Executive of the complainant company testified that on 06.04.2006, the accused stood as a guarantor for a vehicle loan of Rs. 3,78,000/- availed by Mr. Aneesh who is the brother of the accused agreeing to repay the loan amount in monthly instalments and executed Ext.P13 hypothecation agreement. A perusal of Ext.P13 would show that accused stood as a guarantor for the vehicle loan of Rs. 3,78,000/- availed by his brother Ane