MANAPPURAM GENERAL FINANCE AND LEASING LTD. v. ACCUSED AND STATE

P. Q. BARKATH ALI, J. =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=Crl.A.No. 951 of 2003=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=Dated this the 2nd day of March, 2012JUDGMENTAppellant is the complainant in S.T. No.632/1999 onthe file of the Chief Judicial Magistrate, Thrissur. He filed acomplaint under section 138 of the Negotiable InstrumentsAct against the 1st respondent/accused before the learnedMagistrate. The learned Magistrate by the impugnedjudgment dated May 6, 2003 dismissed the complaintholding that the complainant has not succeeded in provingthe case against the accused beyond doubt and acquittedthe accused. The complainant has come up in appeal withspecial leave challenging the said judgment of the lowercourt. 2. The appellant/complainant is M/s. ManappuramGeneral Finance and Leasing Ltd., represented by its Powerof Attorney Holder and the Legal Officer (PW1). The case ofthe complainant, as testified by PW1 before the lower courtand as detailed in the complainant, in brief, is this:- The CRA 951/20032complainant is a financing institution giving equipment andvehicles on lease. Under lease agreement No.2960/1998,which is marked as Ext.D1, the accused obtained a busbearing registration No.KL8/J 7990 on lease on December16, 1996. The agreement was to repay the amount ininstalments. The accused defaulted the instalments.Towards the balance amount of `1,53,704/-, the accusedissued a cheque Ext.P2 dated December 12, 1998, drawn onthe Guruvayur Branch of Vijaya Bank, which whenpresented for collection was returned dishonoured for wantof sufficiency of funds in the account of the accused in thebank and in spite of the notice Ext.P5 dated January 7,1999, the accused did not re-pay the amount. Therefore, thecomplainant filed the complaint before the lower courtunder section 138 of the Negotiable Instruments Act.3. On receipt of the complaint, the lower courtrecorded the sworn statement of the complainant and tookcognizance of the offence. The accused, on appearancebefore the lower court, pleaded not guilty to the charge CRA 951/20033under section 138 of the Negotiable Instruments Act. Onthe side of the complainant, PW1 was examined and Exts.P1to P10 were marked. When questioned under section 313Cr.P.C., the accused submitted that at the time of leaseagreement, he had given a signed blank cheque as security,which was misused by the complainant firm and createdExt.P1. No defence evidence was adduced. 4. On an appreciation of evidence, the learnedMagistrate found that Ext.P2 cheque was issued only assecurity at the time of availing the loan and not issuedtowards any liability or debt and that prosecution undersection 138 of the Act will not lie against the accused. Thecomplaint was accordingly dismissed and the accused wasacquitted. The complainant has now come up in appealchallenging the said judgment of the lower court.5. Heard the learned counsel for theappellant/complainant and the learned counsel for the firstrespondent/accused.6. The following points arise for consideration in this CRA 951/20034appeal :- 1) Whether the judgment of the lower courtacquitting the 1st respondent/accused can besustained?2) In the event of conviction, what is the propersentence that can be imposed?7. PW1, the Power of Attorney Holder of thecomplainant firm, testified in terms of the complaint beforethe lower court. His evidence is supported by Exts.P1 toP10. 8. The learned Magistrate dismissed the complaint onthe ground that Ext.P2 cheque was issued as security by theaccused. But for several reasons, I feel that the abovefinding of the lower court cannot be sustained. This Court inGeneral Auto Sales V. Vijayalakshmi (2005 (1) KLT 478relying on a decision of the Apex Court in ICDS Ltd. V.Beena Shabeer (2002(3) KLT 218) held that “even if a blankcheque has been given towards liability or even as security,when the liability is assessed and quantified, if the chequeis filled and presented to the bank, the person who had CRA 951/20035drawn cheque cannot avoid the criminal liability arising outof 138 of the Negotiable Instruments Act.” Therefore, I amnot inclined to accept the contention of the accused that hehas not issued any cheque to the complainant to dischargeany liability. Hence, the finding of the lower court that asExt.P1 cheque is issued as security no prosecution will lieagainst the accused under section 138 of the NegotiableInstruments Act is set aside and I hold that Ext.P1 chequewas issued by the accused to discharge a legallyenforceable liability.9. In the present case, evidence of PW1 coupled withExts.P1 toP10 proves the execution of Ext.P2 cheque by theaccused. Ext.D5 copy of the statement of accounts producedby the accused shows that so much amount is due on thedate of issuance of cheque. Further it is the admitted casethat the complainant has filed a civil suit, which has beendecreed. Under these circumstances, as execution of Ext.P2cheque is proved, presumption as envisaged under sections118 and 139 of the Negotiable Instruments Act is available CRA 951/20036to the complainant. No evidence was adduced by theaccused to rebut the above presumption. 10. For all these reasons, I set aside the finding of thelower court that the complainant has not succeeded inproving the case against the accused beyond doubt and Ihold that the complainant has proved that towards thedischarge of a legally enforceable liability, the accusedissued Ext.P2 cheque, which when presented for collectionwas returned dishonoured for want of sufficiency of fund inthe account of the accused in the bank and in spite of noticeExt.P4, the accused did not repay the amount, which is anoffence punishable under section 138 of the NegotiableInstruments Act. That being so, I convict the accusedthereunder.11. As regards the sentence, as the transaction is ofthe year 2001, I feel that sentence of imprisonment till therising of court and to pay a compensation of `1,55,000/- tothe complainant with default sentence would meet the endsof justice. CRA 951/2003712. In the result, this appeal is allowed. The impugnedjudgment of the lower court is set aside. The accused isfound guilty of the offence punishable under section 138 ofthe Negotiable Instruments Act. He is sentenced to undergoimprisonment till the rising of court and to pay acompensation of `1,55,000/- to the complainant, in defaultto undergo simple imprisonment for three months. Threemonths' time is granted for payment of the compensation.The accused is permitted to pay the compensation direct tothe complainant firm and produce receipt before the lowercourt. The 1st respondent/accused shall surrender beforethe lower court on or before March 30, 2012 to suffer thesentence.P. Q. BARKATH ALI,JUDGE. mn.