Cyriac Jose vs State Of Kerala & Anr.

This appeal has been filed by the complainant in S.T. No. 4 of 2018 on the files of the Judicial First Class Magistrate Court – III, Kanjirappally challenging the judgment rendered therein, dated 30.04.2024, whereby the accused therein was acquitted for the offence punishable under Section 138 of the Negotiable Instrument Act, (hereinafter referred to as 'N.I. Act', for short).

Heard the learned counsel for the appellant/complainant, the learned Public Prosecutor appearing for the first respondent. Even though the notice to the second respondent/accused was served by affixing notice, after intimating the same to his mother, Mercy John, having mobile No. 9947131802, the second respondent did not appear. Accordingly, Sri. Adithya Narayanan K.G., is appointed as the State Brief to argue the case for and on behalf of the second respondent/accused. Perused the judgment under challenge and the records of the trial court.

The case of the prosecution is that the complainant worked as a Factory Manager of M/s. High Range Foods (P) Limited engaged in distribution of Lazza Ice creams in Panamattam. Further case is that he had authorised the accused herein to supply ice-creams from the said company and collect amounts of the ice-creams sold. But the accused was reluctant to pay the amount promptly and later, it was found that an amount of Rs.6,61,741/- was due from him as on 26.10.2016. Accordingly, an agreement was executed whereby the accused agreed to repay the amount due to the company. The case of the complainant is that, then accused issued Ext.P1 cheque, dated 13.12.2016, drawn on South Indian Bank Limited, Ponkunnam Branch in his name, since by the time, in order to preserve the job of the complainant, he had paid the liability due to the company and thereby, he would be entitled for getting the cheque amount, which he had paid to the company. Anyhow, Ext.P1 cheque, when presented for collection the same was dishonoured as per Ext.P2 dishonour memo. When Ext.P3 notice was issued, the same was accepted by the accused as per Ext.P5 acknowledgment card, but he did not repay the amount. It is on this premise the complainant launched prosecution alleging commission of offence under Section 138 of the N.I. Act by the second respondent/accused.

The learned Judicial First Class Magistrate recorded the evidence confined to that of PW1 and PW2, Exts.P1 to P7 and Ext. D1 and finally acquitted the accused on finding that the amount was due to M/s. High Range Foods (P) Limited and the complainant had no case that he had paid the amount to the company. Accordingly, the learned Judicial Magistrate found that the complainant failed to prove the case canvased by him and also he had failed to establish that Ext. P1 cheque was issued by the accused towards any legally existing debt in favour of him.

The learned counsel for the complainant argued that the learned Judicial Magistrate approached the case without understanding the case put up by the complainant and the learned Judicial Magistrate on wrong assumption of facts and evidence, even held that “as adverted earlier, the complainant has no case that he has paid the amount to the company” in a case wherein paragraph No. 4 of the complaint, the complainant categorically pleaded that he had paid Rs.6,61,741- to the company. Thus the case advanced by the learned counsel for the complainant is that in this case, the complainant has a specific case that he had entrusted the accused with the job of supplying ice-creams and collecting the value of the same from the shops. According to him, he was responsible to remit the amount of ice-creams sold to the company and it was the duty of the accused to entrust the money to him. His further case is that despite issuance of legal notice of demand, the accused did not repay the cheque amount or even failed to send a reply. In this context, the learned counsel for the complainant, fervently argued that the case of the complainant herein to be appreciated as the holder of Ext. P1 cheque for the amount due to him, since he had discharged the liability of the accused. Thus the learned counsel for the appellant pressed for interference in the verdict impugned.

Whereas the learned State Brief appearing for the second respondent/accused strongly opposed the contentions raised by the learned counsel for the appellant/complainant and submitted that in this case, the finding of the learned Judicial Magistrate is perfectly in order and at the time of the issuance of cheque, there is no legally enforcible debt due to the complainant and the allegation itself is that the amount was due to the complainant as evident from Ext.P7 agreement. Therefore, the verdict is liable to be confirmed.

In view of the rival submissions, the points arise for consideration are:

Points Nos. 1 to 3: In this case, the complainant himself got examined as PW1 and he deposed his case in tune with the averments in the complaint. According to him, Rs.6,61,741/- was due from the accused towards the sale price of ice-creams, entrusted him for supply and sale. When it was noticed that the accused failed to pay the amount, he had obtained as the sale price, the amount was calculated and accordingly, the amount was arrived at Rs.6,61,741/-. Then, the accused agreed to repay the same by executing Ext.P7. According to him, Ext.P1 cheque was issued by the accused to repay the said sum, in his name, since he had discharged the liability of the Company. But the same got dishonored for want of funds and it was through him Exts.P1 to P7, tendered in evidence. During cross examination, while asking the details of the mode of sale and collection of the amount, the contention raised by the accused is that Exts. P1, P6 and P7 were created fraudulently and there had been no legal ground to file complaint against the accused. In order to show execution of Ext.P7 and issuance of Ext.P1 cheque, PW2, who had witnessed the execution of Ext.P7 agreement also was examined and he, in fact, supported the evidence of PW1, without any ambiguity.

Here, in paragraph Nos. 14 and 15 of the judgment impugned, the learned Judicial Magistrate observed as under:-

Here the learned Judicial Magistrate recorded acquittal of the accused mainly on the finding that the amount was due to the company and the cheque was also issued for the debt due to the company. Another ground found by the learned Magistrate for acquitting the accused is that the complainant did not put up a case that he had paid the amount to the company. As regards the finding of the learned Magistrate that the complainant had no case that he had paid the amount to the company, the same is an erroneous finding entered into by the learned Magistrate, without adverting to the averments in the complaint, since as contended by the learned counsel for the complainant, the complainant specifically averred in the complaint that he had repaid the amount to the company and the said contention in no way disputed. In this context, it is pertinent to note further that here Ext.P1 cheque was issued in the personal name of the complainant and the complainant, in fact, discharged the liability to the company. If so, the complainant is the holder of Ext.P1 cheque for consideration. Therefore, the complainant is the person entitled to encash Ext.P1 cheque, since Ext.P1 was issued in the name of the complainant and either in Ext.P1 or anywhere it is stated that, the issuance of Ext.P1 cheque was for the company. In the said circumstances, learned Magistrate went wrong in finding that the complainant failed to establish that Ext.P1 cheque was issued by the accused towards the legally existed debt in favour of him, is erroneous and unsustainable. Hence, the same would require interference to reverse the same.

In the result, this appeal is allowed. The verdict impugned is set aside. As a consequence thereof, it is held that the accused committed offence punishable under Section 138 of the N.I. Act. Accordingly, he is sentenced to undergo simple imprisonment for a day till the rising of the court and to pay a fine of Rs. 7,50,000/-, for the offence punishable under Section 138 of the N.I. Act. In default of payment of fine, he shall undergo simple imprisonment for a period of six months. It is specifically ordered that if the fine amount is either paid or realised, Rs.7,30,000/- shall be given to the complainant as compensation and the remaining amount shall go to the State Exchequer towards the cost of the State. The accused is directed to appear before the trial court to undergo the modified sentence on or before 12.10.2026, failing which the learned Magistrate shall execute the modified sentence, in accordance with law.

The Registry is directed to forward a copy of this judgment to the learned Magistrate concerned for information and compliance, without fail.