J.M.JAMES v. State of Kerala [1999 (3) KLT 849] andacquitted

J.M.JAMES, J. - - - - - - - - - - - - - - - - - - - -Crl.A. No. 1771 of 2003 (D) - - - - - - - - - - - - - - - - - - - -Dated this the 20th day of March, 2007J U D G M E N TOn the death of the original complainant, his widow,Hajira Beegum, was impleaded before the court below. Thecomplaint was preferred against the first respondent, theaccused, under Section 138 of the Negotiable Instruments Act, inshort 'the Act'. To prove the case, the complainant hadexamined herself as PW.1 and marked five documents. The firstrespondent had marked two documents, Exhibit D1 and D2. Thecourt below, Judicial Magistrate of the First Class Court-I,Ernakulam, in C.C.No.146/1999, accepted the principle laid downin Sreenivasan vs.State of Kerala [1999 (3) KLT 849] andacquitted the accused. Hence, this appeal challenging the orderof acquittal, after obtaining leave. 2.The brief facts of the case are that the husbandof the appellant, issued a cheque for rupees two lakhs in thename of one C.M.John, on the latter agreeing to arrange an Crl.A.No.1771/2003 -: 2 :-admission for M.B.B.S, at Bangalore Medical College, to thegrandson of the appellant. In the absence of the said C.M.John,the first respondent accused received the said cheque, and as asecurity, he in turn, issued Exhibit P1 cheque to the husband ofthe appellant. Exhibit D2 agreement was entered into betweenthe husband of the appellant as well as the first respondent-accused. In it, the parties have made clear that anotheragreement would be entered into between C.M.John and thehusband of the appellant. The cheque of the accused would bereturned to him, after the arrangements materialise. It iscomplained of that, though Exhibit D1 agreement betweenC.M.John and the husband of the appellant had been executed,Exhibit P1 cheque had not been returned. The facts furtherreveal that the promised admission, to M.B.B.S course, to thegrandson of the appellant, was also not arranged. The learnedcounsel for the first respondent submits that C.M.John isabsconding and Exhibit P1 cheque issued by him was only as asecurity. He had not received any consideration. Therefore, he Crl.A.No.1771/2003 -: 3 :-is not liable. Hence, the counsel urges to sustain the lower courtjudgment. 3.The learned counsel for the appellant relying onI.C.D.S. Ltd. vs.Beena Shabeer [2002 (3) KLT 218 (SC)],argued that Sreenivasan's case cited supra is no more a good lawand it has been overruled. Therefore, even a person who issueda cheque as a guarantor or for security, is liable to be proceeded,under Section 138 of the Act. Hence, prayed that the judgmentof the lower court may be set aside. 4.I have gone through the facts of the case. Ihave also gone through the legal principles laid down by theApex Court. I respectfully agree with those propositions, ExhibitP1 cheque was issued by the first respondent-accused-to thehusband of the appellant, as a security, in return to the chequethat was issued by the latter for an amount of rupees two lakhsto C.M.John. The first respondent-accused was an agent ofC.M.John. Despite the execution of Exhibit D1, betweenC.M.John and the husband of the appellant, the first respondent-accused-is liable to be proceeded against, under Section 138 of Crl.A.No.1771/2003 -: 4 :-the Act. Therefore, in accordance with the principles in BeenaShabeer's case, cited above, the dismissal of the complaint isunsustainable.5.A Division Bench of this Court had held inLillykutty vs. Lawrance [2003 (3) KLT 721] that a person whois holding a cheque in due course can proceed against the drawerof the cheque, unless the latter rebuts the presumption availableunder Sections 118 and 139 of the Act, as per the principles ofpreponderance of probabilities and, in such circumstances, thecourt has to presume that the cheque had been issued afterreceipt of the consideration. In the case at hand, the cheque forrupees two lakhs was received by the first respondent from thehusband of the appellant. He issued Exhibit P1 cheque, as asecurity for the amount contained in the cheque, rupees twolakhs, issued to C.M.John, the uncle of the first respondent.Although Exhibit D1 agreement was entered into betweenC.M.John and the late husband of the appellant, Exhibit P1cheque continued to be in the possession of the late husband ofthe appellant. Therefore, it cannot be said that Exhibit D1 Crl.A.No.1771/2003 -: 5 :-agreement has given any opportunity, or took away theresponsibility and liability of the first respondent-accused fromdischarging the liability contained in Exhibit P1 cheque. I do notfind any evidence adduced, except producing Exhibits D1 and D2documents. When I appreciate the entire materials producedbefore me and the evidence available on record, I find that thelower court has gone wrong in dismissing the complaint.6.The next question is, in the light of the evidenceavailable, whether the first respondent could be convicted. Atthis stage the learned counsel for the first respondent-accusedsubmits that a criminal case has been registered against the firstrespondent as well as his uncle C.M.John. The first respondenthas been convicted, as the said C.M.John is absconding. It isalso further submitted that an appeal filed by the first respondentis pending, before the Fast Track Court-II, Ernakulam, forjudgment. In such circumstances, the counsel further prays thatan opportunity may be given to the first respondent-accusedeither to settle the matter or to allow him to adduce furtherevidence. Crl.A.No.1771/2003 -: 6 :-7.In the above circumstances, I set aside theimpugned judgment dated 11/09/2002 and restoreC.C.No.146/1999. The case is remitted to the Judicial Magistrateof the First Class Court-I, Ernakulam.8.The parties shall appear before the court belowon 26/04/2007.9.The case being of the year 1999, I direct thelearned Magistrate to dispose of the same, within three monthsfrom the date of appearance of the parties before the courtbelow, as per the law. The appeal is accordingly allowed.(J.M.JAMES)Judgems