Full Judgment
1. The challenge in this Crl.Revision Petition is against the conviction and sentence imposed against the revision petitioner, who is the accused in a prosecution for the offence punishable under section 138 of the Negotiable Instruments Act (for short, the N.I.Act).
2. The case of the complainant, the first respondent herein, is that the complainant and the accused are close family friends and out of that relationship, the revision petitioner/accused borrowed a sum of Rs.2,50,000/- from the complainant on 5.12.2003 and on receipt of the said amount, towards the discharge of the said liability, the accused issued a cheque dated 5.12.2003. According to the complainant, when the above said cheque was presented for encashment, the same was dishonoured for the following reasons:
(1) Drawer's signature incomplete,
(2) payment stopped by the drawer and
(3) funds insufficient. On receipt of the dishonour memo, the complainant caused to issue a lawyer notice informing the accused regarding the dishonour of the cheque and also demanding for the payment of the amount covered by the dishonoured cheque and in spite of receipt of the notice, no amount is paid by the accused and thus according to the complainant, the accused has committed the offence punishable under section 138 of the N.I.Act.
3. With the above allegation, the complainant by filing a complaint approached the Judicial First Class Magistrate Court-IV Kozhikode, upon which cognizance was taken for the offence under section 138 of the N.I.Act and instituted C.C.No.18/2004. During the trial, the complainant himself was examined as PW1 and he produced Exts.P1 to P4 documents as Exhibits for the prosecution. From the side of the defence, no evidence, either oral or documentary, is adduced. By an elaborate judgment, the trial court found that the complainant had complied with all the requirements to initiate prosecution under section 138 of the NI Act and also found that the cheque in question was issued to discharge a legally enforceable debt and the cheque was dishonoured for want of sufficient funds in the account of the accused.
Thus the trial court has found that the accused is guilty of the offence punishable under section 138 of the N.I.Act and he is convicted for the said offence.
On such conviction, the accused is sentenced to undergo simple imprisonment for 6 months and to pay a sum of Rs. 2,50,000/- as compensation to the complainant under section 357(3) Cr.P.C. The default sentence is fixed as 3 months simple imprisonment.
4. Challenging the above conviction and sentence, though the revision petitioner had preferred an appeal, by judgment dated 26.6.2008 in Crl.A.No.310/2007, the IInd Addl. Sessions Judge, Kozhikode, allowed the appeal only in part and thus while confirming the conviction of the revision petitioner under section 138 of the Act, the sentence is modified and the revision petitioner is sentenced to undergo imprisonment till rising of the court and directed to pay a compensation of Rs.2,50,000/- to the complainant under section 357(3) of Cr.P.C and, in default in paying the compensation amount, he is directed to undergo simple imprisonment for three months.
It is also ordered that on realisation of the compensation amount, the entire amount shall be paid to the complainant. It is the above conviction, sentence and order to pay compensation that are challenged in this revision Petition.
5. I have heard Sri Sudhissh.R, the learned counsel appearing for the revision petitioner and Sri P.M. Mohammed Shiraz, the learned counsel appearing for the Ist respondent and Sri V.Tek Chand, the learned Public Prosecutor appearing for the 2nd respondent. I have also perused the evidence and materials on record.
6. The learned counsel for the revision petitioner vehemently argued that the complainant has miserably failed to prove the offence against the revision petitioner/accused beyond reasonable doubt.
The learned counsel submitted that the revision petitioner has succeeded in establishing a probable case, but the courts below have found the same as false. It is the further contention of the learned counsel that both the courts have miserably failed to look into the falsity of the case put forward by the complainant.
According to the learned counsel, the revision petitioner has succeeded in rebutting the presumption but the courts below committed wrong in holding otherwise. According to the learned counsel, the complainant has not proved the transaction alleged by him and the courts below miserably failed to appreciate the above aspect. It is also the case of the learned counsel that one of the reasons for dishonour of the cheque is due to the "stop payment" issued by the revision petitioner/accused and thereby the revision petitioner has succeeded in establishing his defence.
It is also the contention of the learned counsel that as admitted by the complainant, one of the reasons for dishonour of the cheque is due to "signature incomplete" and if that be so, there is no execution of the cheque and hence no presumption under section 139 can be drawn in favour of the complainant. Another contention advanced by the learned counsel is that the trial court, by dismissing the petition filed by the revision petitioner for summoning the bank officials to prove the fact that he had issued stop memo, denied the opportunity to substantiate his defence and thereby the revision petitioner is highly prejudiced.
Thus, according to the learned counsel, both the trial court as well as the lower appellate court arbitrarily denied the opportunity to the revision petitioner to rebut the presumption. Therefore, it is the plea of the learned counsel, that the impugned judgments are liable to be set aside and the revision petitioner is entitled to get a clear acquittal or else the matter can be remitted back to the trial court for fresh disposal after affording an opportunity to the revision petitioner to adduce evidence for effectively rebutting the presumption.
In support of the fervent pleas for an acquittal, Mr. R.Sudhissh, the learned counsel appearing for the revision petitioner, relied upon the following decisions: M/s.Modi Cements Limited v. Shri Kuchil Kumar Nandi (JT 1998 (2) SC 198); Vinod Tanna & Anr. v. Zaheer Siddiqui & Ors. (J.T. 2001(10) SC 345); Joseph v. Gladis Sasi ( 2010 (3) KLT 379); Shaju N.I. v. T.K. Paulose (2009(3) KHC 626); Jose v. Joy ( 2008 (3) KLT 512) ; Krishna Janardhan Bhat v. Dattatraya G Hegde (2008 (1) KHC 410 (SC) ; Kamalammal v. Mohanan (2006(3) KLT 972); Gopan v. Tonny Varghese (2008 (1) KLT 257); Bhaskaran Nair v. Mohanan (2009 (3) KLT 580); Sanjay Mishra v. Ms.Kanishka Kapoor @ Nikki (2009 (2) KLD 825 (Bom.)
7. On the other hand, stoutly opposing the contentions advanced by the counsel for the revision petitioner and fully supporting the findings and the judgments of the trial court as well as the lower appellate court, Sri P.M.Mohammed Shiraz, the learned counsel for the Ist respondent/complainant submitted that the accused has not adduced any evidence to rebut the presumption which is otherwise available in favour of the complainant and the accused was not even cared to send any reply to Ext.P4 lawyer notice though he had received the same. All the defence of the accused was pleaded only for the first time at the time of Sec.313 questioning and no evidence is adduced to substantiate such pleading.
The learned counsel further submitted that the complainant himself mounted to the box and gave oral evidence in support of his averments in the complaint and he produced the cheque in question from his possession which contained the signature of the accused. The above evidence of PW1 remains intact as there was no effective challenge against the same. Thus according to the learned counsel, the trial court as well as the lower appellate court has rightly drawn the presumption under section 139 of the N.I.Act in favour of the complainant. But the revision petitioner/accused failed to rebut the presumption. Relying upon the recent decision in Rangappa v. Mohan (2010 (2) KLT 682)(SC), the learned counsel for the Ist respondent submitted that the accused has miserably failed to prove the reason for "stop payment" and hence it cannot be said that he had discharged his burden of rebutting the presumption.
It is also the submission of the learned counsel that the revision petitioner preferred a petition to call for the bank records only belatedly and though the petition was allowed during the defence stage, i.e. on 20.2.2007, no batta was paid in time which persuaded the trial court to close the defence evidence on 14.3.2007. According to the learned counsel, there is nothing illegal on the part of the trial court in dismissing the petition and the same was done only because of the omission on the part of the revision petitioner and hence, there is no merit in arguing that no opportunity was given for the defence. The learned counsel further submitted that the dishonour memo would show that the cheque was dishonoured for three reasons and one among the three reasons is insufficiency of funds in the account of the accused and hence no prejudice is caused to the revision petitioner/accused by dismissing the aforesaid petition.
According to the learned counsel, there is no question of law involved and all other contentions raised by the counsel for the revision petitioner are purely based upon facts and evidence which had already been dealt with by the trial court as well as the lower appellate court and there is no scope for this court to interfere with such facts and evidence while exercising the revisional jurisdiction of this court. Therefore, the counsel for the first respondent submitted that this revision petition may be dismissed as there is no merit in the same.
8. I have carefully considered the arguments advanced by the respective counsel and also closely perused the evidence and materials on record. In the light of the rival pleadings and the materials and evidence on record, the question to be decided is whether the trial court and the lower appellate court are correct in their findings that the revision petitioner has committed the offence under section 138 of the Act.
The trial court as well as the lower appellate court on the basis of the evidence and materials on record found that the amount of Rs.2,50,000/- was borrowed by the revision petitioner from the complainant and towards the discharge of the said liability, the accused executed the cheque and issued the same to the complainant.
The above findings are vehemently challenged by the counsel for the revision petitioner.
9. At the outset, it is to be noted that though the complainant has sent Ext.P4 statutory notice and the same was received by the revision petitioner, no reply was given and consequently, the revision petitioner has miserably failed to avail the first and best opportunity to set forth his defence and to prevent the complainant from taking a legal action, if the defence is true. The learned counsel submitted that the accused can keep silent which does not mean that he had admitted the allegation of the complainant. The above submission could have been accepted if the defence has succeeded in effectively challenging the case and evidence of the complainant. When PW1 was examined, he was not effectively cross examined, particularly, with respect to the transaction claimed by him. He had stated the circumstances under which the amount was given to the revision petitioner and the place of the transaction and the issuance of the cheque after putting signature by the accused.
The only perfunctory question put to him is regarding the name mentioned in Ext P1 cheque and the date on it. No other aspect was cross examined including the deposition of PW1 regarding the execution of the cheque and the signature contained therein.
Therefore the failure of the revision petitioner to send an effective reply to the legal notice and his failure in establishing his case, reinforced the case of the complainant. Thus I find no illegality regrading the findings of the trial court as well as the lower appellate court in favour of the complainant with respect to the transaction and issuance of the cheque.
10. Of course, the revision petitioner has a case that he did not issue the cheque to the complainant and the signature which contained in the cheque is not of his and the cheque in question is one which lost from his possession and he had issued stop memo connected with the loss of the cheque. As I indicated earlier, during the cross examination there is no serious attack against the evidence rendered by PW1 regarding the execution of the cheque and nothing was brought to disbelieve or even shake the evidence of PW1. No reply was also given to the lawyer notice issued by the complainant. On the strength of the decision in Vinod Tanna & Anr. v. Zaheer Siddiqui & Ors (J.T.2001(10) SC 344), the learned counsel submitted that no offence under section 138 is attracted against the revision petitioner since there is no execution of cheque in the present case as the signature is incomplete.
11. I am unable to sustain the above contention. On a reading of Section 138 of the N.I Act, it is crystal clear that the liability under section 138 of the NI Act is attracted mainly for either of the two ingredients, that is, the account holder has no sufficient funds at the credit of his account to honour the cheque or that the amount in the cheque exceeds the amount which the account holder has at his credit.
In the present case, for the dishonour of the cheque, the main reason is insufficient fund in the account of the drawer which is a ground inbuilt in the penal provision itself. Therefore even if there was no "stop memo" or "signature incomplete", the cheque in question would not have been honoured.
Hence the essential statutory requirement to attract Section 138 of the NI Act has been established by the complainant.
12. In view of the above findings, the further question to be considered is whether the revision petitioner has succeeded in establishing at least a probable case to rebut the presumption under section 139 of the NI Act.
In this juncture, it is only apposite to consider one of the contentions raised by the counsel that since the signature in the cheque is incomplete, there is no execution of cheque and hence no presumption is available in favour of the complainant. It is also relevant to note that PW1 has categorically stated that the accused had issued the cheque putting his signature when he borrowed the amount. During the chief Examination, PW1 has stated:
" .
" 15
. 2 1/2
.
. 5/12/2002- 2 1/ 2
.
. 5/12/2003
. ..............
.
present ".
Further during the cross examination, PW1 has deposed that:
.
.
. 5/12/2003- .
.
That evidence of PW1 has not been challenged effectively and nothing is brought on record to disbelieve that version. At the time of receiving Ext.P1 cheque, the complainant was not in a position to know whether the signature put in Ext.P1 cheque by the revision petitioner was his incomplete signature or the same was not his own signature or put by another person.
No evidence is adduced or nothing is brought on record to show that the signature contained in Ext.P1 cheque is not that of the revision petitioner and the same was not put by him and the same was put by the complainant or somebody else. It is also relevant to note that no reply is given to the lawyer notice stating anything regarding the signature. Had there been a proper reply regarding the "incomplete" signature, the pleadings and evidence would have been shaped in such a manner so as to meet that defence. During the trial of the case also, no step was taken to get examined Ext.P1 cheque to show that signature seen therein was not put by the revision petitioner. During trial when the complainant had adduced evidence, in support of his claim and allegation, to which I referred above, it is for the accused to adduce contra evidence or to make out a probable case at least by cross-examining PW1. When PW1 deposed that the accused issued the cheque putting his signature, it is for the accused to take steps to show that he had not put his signature in Ext.P1 cheque.
Merely stating one of the reasons stated in the dishonour memo, that is, "incomplete signature", the accused cannot be said to have discharged his burden, particularly, in the nature of evidence adduced by the complainant. If the cheque in question had been sent for expert opinion, after comparison of the original signature of the accused, the expert could have formed his opinion as to whether the signature contained in Ext.P1 cheque was put by the same person, namely, the revision petitioner. Presumably, the revision petitioner had not ventured for the same, because his guilt would come out.
In the light of the evidence of PW1, as referred above and in the absence of any positive evidence at the instance of the revision petitioner/accused that the incomplete signature contained in the cheque was not put by the accused/revision petitioner and it was not his signature, especially, when one of the reasons for dishonour of the cheque is due to insufficiency of funds, which is the ground fixed by the Statute, merely because the cheque contained an incomplete signature, is not a ground to get rid of the penal liability of the revision petitioner/accused under section 138 of the Negotiable Instruments Act.
If the contention of the learned counsel is accepted that there is no execution of the cheque as the signature is incomplete , the same will go against the very purpose of the enactment of Section 138 of the N.I.Act. As I indicated earlier, when the complainant or the holder of cheque had given money to the accused or the drawer of the cheque, the payee or the holder of the cheque was not aware of the fact that the signature put in there is incomplete or not that of the drawer or the same was put by another person. As per the amending Act 2002 of the N.I.Act, incorporation of Chapter XVII is with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument.
Suppose, if the drawer wants to cheat the drawee or the payee, the drawer can put his signature in the incomplete form or in a different manner or different signatures and thereby the very object of the amendment can be defeated. On the other hand, if the accused or the drawer has got a true defence that the incomplete signature which contained in the cheque in question was not put by him, it is for him to prove the above fact, especially, when the evidence of the complainant is that the accused issued the cheque after putting his signature. Under the above factual background and the evidence, unless it is established that the signature in Ext.P1 cheque was not put by the accused or put by somebody, other than the revision petitioner, it cannot be said that the cheque was not executed by the accused and no presumption can be drawn under section 139 of the N.I.Act and the liability under section 138 of the NI Act is not attracted.
Therefore it is for the revision petitioner to explain as to how the cheque in question, which pertained to his account bearing his incomplete signature reached in the possession of the complainant.
But the revision petitioner has miserably failed to give any plausible and acceptable explanation supported by evidence. Hence the contention of the learned counsel on this count fails.
13. It is also relevant to note that though in the dishonour memo it is stated that the cheque was dishonoured due to direction for stopping the payment, it is also crystal clear that there was no sufficient fund in the account of the accused revision petitioner. In M/s Modi Cements Limited v. Shri Kuchil Kumar Nandi (JT 1998(2) SC 198) , the Apex court has held that stopping of payment will not preclude an action under section 138 of the N.I.Act.
In the present case, as indicated earlier, no reply was given to the legal notice and the revision petitioner has miserably failed to avail the opportunity granted to him and no evidence was adduced regarding the stop payment and even if it is proved that he had issued a letter to the bank authorities to stop the payment, that will not exonerate him from the liability under section 138 of the Act, in the light of the other evidence.
14. In this juncture, it is relevant to note that though the cheque is dated 5.12.2003, as per the deposition of PW1, he had demanded for the money after one year and thereafter presented the cheque. In the present case, the accused received the demand notice on 19.12.2003. But according to the revision petitioner, the bank was informed about the loss of the cheque and a direction was issued to stop payment on 7.7.2003.
There is no evidence or materials to show on which date the cheque in question was lost from the possession of the revision petitioner and what were the steps taken thereafter.
In the absence of any concrete evidence and factual details as indicated above, regarding the alleged loss of cheque and the timely information to the bank for stop payment, especially in the light of the deposition of PW1 that after one year from the date of availing of loan, the revision petitioner was demanded for return of money and the cheque was presented for encashment, the version of defence cannot be swallowed without a pinch of salt.
In the decision of the Apex Court in Rangappa v.Mohan (2010(2) KLT 682)(SC), the Apex Court held that it is for the accused to prove the reason for stop payment.
But the revision petitioner/accused miserably failed to establish the reason for the stop payment. Though an opportunity was given as prayed for by him for the examination of the bank authorities, that opportunity was not availed. Therefore, the revision petitioner cannot be justified in complaining that he was not given sufficient opportunity to substantiate his defence.
15. In the light of the above discussion and the facts and circumstances and the materials referred to above, and in the legal position, I am of the view that the trial court as well as the lower appellate court is perfectly justified in its finding regarding the guilt of the revision petitioner and the conviction under section 138 of the N.I.Act, which are only to be approved and I do so.
16. The learned counsel submitted that if this Court is not inclined to interfere with the conviction recorded by the courts below, a breathing time may be granted to the revision petitioner to pay the compensation amount as ordered by the courts below.
Having regard to the facts and circumstances involved in the case, I am of the view that the above submission of the learned counsel has to be considered positively bearing in mind the other relevant inputs of the case.
As per the records, the cheque in question is dated 5.12.2003, that too for an amount of Rs.2,50,000/- and as per the findings of the courts below which are approved by this court, the said amount which belongs to the complainant is with the revision petitioner for the last seven years.
Though the trial court on convicting the revision petitioner, imposed a sentence of six months simple imprisonment, by the judgment dated 20.3.2007, the appellate court has reduced the sentence to one day's simple imprisonment but maintained the direction to pay the compensation amount as fixed by the trial court. Though the appellate court disposed of the appeal on 26.6.2008, no amount is seen paid so far to the complainant.
17. The Apex Court, in its recent decision in Damodar S.Prabhu v. Sayed Babalal H (J.T.2010 (4) SC 457), has held that in a case of dishonour of cheques, compensatory aspect of the remedy should be given priority over the punitive aspect.
Having regard to the facts and materials referred above and in view of the Apex Court decision cited supra, I am of the view that the sentence of imprisonment now modified and fixed by the appellate court can be set aside and instead of sentencing him to undergo imprisonment, he can be sentenced to pay fine and the fine amount can be fixed bearing in mind the date of execution of the cheque and the duration of the liability
In the result, this Crl.R.P. is disposed of confirming the conviction of the revision petitioner under section 138 of the N.I.Act as recorded by the trial Court as well as the lower appellate court.
Accordingly, in supersession of the sentence of imprisonment ordered by the trial court and modified and refixed by the appellate court, the revision petitioner is sentenced to pay a fine of Rs.2,80,000/- and the revision petitioner is granted three months time to deposit the said fine amount and in case of any default in paying the above fine amount within the above stipulated time, the revision petitioner is directed to undergo simple imprisonment for a period of six months. Accordingly, the revision petitioner is directed to deposit the fine of Rs.2,80,000/- (Rs.Two lakhs and eighty thousand) before the trial court on or before 30th December, 2010. If there is any failure on the part of the revision petitioner in depositing the above fine amount, the trial court is free to take coercive steps to secure his presence and to realise the fine amount. On realisation of the fine amount, a sum of Rs.2,75,000/- (Rs.Two lakhs seventy five thousand only) shall be paid to the complainant as compensation under section 357(1)(b) Cr.P.C and the remaining amount shall be deposited in the State Exchequer. Coercive steps if any pending against the revision petitioner shall be deferred till 30.12.2010.
This Crl.R.P. is disposed of accordingly.