Back
2025 Supreme(Online)(KER) 7745
HIGH COURT OF KERALA
SOPHY THOMAS, J
P.G.KOSHY PANICKER – Appellant
Versus
STATE OF KERALA – Respondent
CRL.A 559/2007
ARUN BABU(K/1240/2004), SR. PUBLIC PROSECUTOR SRI.RENJIT GEORGE, P.GOPALAKRISHNAN (MVA), A.N.RAJAN BABU, N.B.RAJU
The absence of valid consideration for a cheque negates the presumption of a legally enforceable debt under Section 138 of the NI Act.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Appeal against acquittal - The complainant alleged that the accused issued a cheque for Rs.3,00,000/- which was dishonoured due to insufficient funds. The trial court convicted the accused, but the appellate court acquitted him, citing lack of evidence for a legally enforceable debt. (Paras 1, 4, 12)
(B) Presumption under Sections 118 and 139 - The accused's denial of borrowing money and the absence of valid consideration for the cheque undermined the presumptions in favor of the complainant. (Paras 6, 12)
(C) Relevance of Civil Court Judgment - The appellate court's acquittal was upheld due to a civil court's finding that the cheque was not supported by valid consideration, affecting the essential elements of Section 138. (Paras 11, 12)
Facts of the case:
The complainant claimed the accused borrowed Rs.3,00,000/- and issued a cheque which was dishonoured. The accused contended he never borrowed the money and that the cheque was misused. (Paras 2, 3)
Findings of Court:
The appellate court found that the complainant failed to establish that the cheque was issued for a legally enforceable debt, thus acquitting the accused. (Paras 12)
Issues: Whether the cheque was issued towards a legally enforceable debt and the relevance of a civil court's judgment on the criminal proceedings. (Paras 11, 12)
Ratio Decidendi: The court emphasized the necessity of proving the existence of a legally enforceable debt to sustain a conviction under Section 138, and the civil court's finding on the lack of consideration was pivotal. (Paras 11, 12)
Result: Appeal dismissed.
J U D G M E N T
This appeal is at the instance of the complainant in CC No.447 of 1999 on the file of Judicial First Class Magistrate Court-I, Kollam, assailing the judgment in Crl.Appeal No.311 of 2002 on the file of Additional Sessions Judge (Ad Hoc-III), Kollam, by which, the accused was acquitted under Section 138 of the Negotiable Instruments Act (hereinafter referred as ‘the NI Act’), reversing the judgment of conviction and sentence by the trial court.
2. The case of the complainant is that the accused borrowed Rs.3,00,000/- from him and issued Ext.P1 cheque dated 11.01.1999 towards discharge of that amount, assuring that it would be honoured on presentation before the bank. But, that cheque was returned dishonoured for the reason ‘funds insufficient’. He sent a registered lawyer notice to the accused intimating dishonour of the cheque, and demanding the cheque amount. In spite of receipt of notice, the amount was not repaid and hence the complaint.
3. On taking cognizance and on appearance of the accused before the trial court, particulars of offence was read over and explained, to which he pleaded not guilty and claimed to be tried.
PWs1 and 2 were examined and Exts.P1 to P6 were marked from the side of the complainant. On closure of complainant’s evidence, accused was questioned under Section 313 of Cr.P.C. He denied all the incriminating circumstances brought on record and stated that he never borrowed any amount from the complainant. He had subscribed a chitty with one Smt.Ammukutty Alex and on auctioning the chitty and receiving the chitty amount, he had given a blank cheque to her, as security for payment of future instalments. He defaulted the future instalments and to clear that liability, he had transferred his property in her favour as per Ext.D3 sale deed. Even then, the blank cheque given by him, was not returned to him by Smt.Ammukutty Alex. Misusing his blank cheque leaf in the name of the complainant, who is a money lender, a false complaint was filed through Adv.Kallada P. Kunjumon, who is none other than the brother of Smt.Ammukutty Alex. DWs 1 to 5 were examined and Exts.D1 to D9 were marked from defence side.
4. On analysing the facts and evidence and on hearing the rival contentions from either side, the trial court found the accused guilty under Section 138 of the NI Act, and he was convicted and sentenced to undergo simple imprisonment for one year and to pay compensation of Rs.3,25,000/-. Aggrieved by the conviction and sentence, the accused preferred Crl.Appeal No.311 of 2002 before Additional District and Sessions Court (Ad Hoc-III), Kollam. The appellate court allowed the appeal, setting aside the conviction and sentence and the accused was acquitted of the offences alleged under of NI Act. Aggrieved by the acquittal of the accused, the complainant has come up with this appeal.
5. Heard learned counsel for the appellant/complainant and learned counsel for the 2nd respondent/accused.
6. Learned counsel for the appellant/complainant would contend that, the accused was not disputing his signature in Ext.P1 cheque and so the complainant was eligible to get the presumptions available under Sections 118 and 139 of the NI Act. Hence, the appellate court ought not have acquitted the accused, reversing the judgment of conviction and sentence by the trial court.
7. Learned counsel for the 2nd respondent/accused would say that the accused had never borrowed any amount from the complainant, and he had never issued Ext.P1 cheque to him towards discharge of any debt. His definite case from the very outset was that, he had subscribed a chitty run by Smt.Ammukutty Alex in the year 1993 and he bid that chitty in the year 1996 and to assure payment of future instalments of that chitty, he had issued a blank signed cheque to her. He is admitting default of the chitty instalments and according to him, he had executed a Sale Deed of his property in favour of Smt.Ammukutty Alex towards discharge of that liability. E
