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2015 DIGILAW 59 (GAU)

Bonanza Portfolio Ltd. v. State of Assam

2015-01-21

PRASANTA KUMAR SAIKIA

body2015
JUDGMENT Prasanta Kumar Saikia, J. 1. This appeal is directed against the judgment and order dated 27.02.2012, passed by the learned Judicial Magistrate, 1st Class, Nagaon in C.R. Case No. 1554c/08 U/s. 138 of the Negotiable Instrument Act, 1881 (for short' the N.I. Act), acquitting the respondent No. 2 herein of offence U/s. 138 of the N.I. Act, (respondent. 2 would be referred to as the accused person). Being aggrieved by the aforesaid judgment, the complainant/appellant preferred this appeal U/s. 378(4) of Cr.P.C. seeking quashment of the aforesaid judgment alleging that the said judgment was rendered in total violation of various provisions of law, so incorporated in the N.I. Act and also in total disregard of the dictum in the Evidence Act. 2. I have heard Mr. G. Saikia, learned counsel for the appellant. Also heard Mr. U.K. Das, learned counsel for the respondents. 3. The case, projected by the appellant (hereinafter referred to as the 'complainant') in its complaint petition which gave rise to C.R. Case No. 1555c/08, in short, is that 'M/s. Bonanza Portfolio Ltd' with its Head Office at New Delhi, is a member of National Stock Exchange of India Ltd., Bombay, Depository participant of NSDL, CSDL, having its Branch Office at ADP Road, Christian-patty, Nagaon, Assam and such branch functions under the name and style "TH Branch" and is run by Branch Manager Mr. Rajdeep Dey. 4. The complainant states that the accused Ms. Sabita Roy had applied for opening a D-Mat Account and Client Account in the aforesaid TH Branch at Nagaon. Such application was submitted in accordance with the procedures, prescribed under the Banking Law. On completion of all the formalities and on acceptance of terms and conditions, specified by the Bank, the complainant had allotted the accused Ms. Sabita Roy the Client A/c. No. DFTH-36. 5. After opening the D-Mat A/c. and Client A/c, the accused Sabita Roy started purchasing trading shares of different companies of line in Future and Option, Derivatives Market and Cash Market since she was already allotted D-Mat Account and Client Account. According to the complainant, up to 18.03.2008, a sum of Rs. 4,56,689.12 was due to the complainant, as per statement in the account in the name of the accused person. 6. According to the complainant, up to 18.03.2008, a sum of Rs. 4,56,689.12 was due to the complainant, as per statement in the account in the name of the accused person. 6. As such, the complainant demanded and requested the accused to clear such dues, where upon, on 19.03.2008, the accused issued Cheque No. 899344 of Indian Bank, Nagaon Branch for a sum of Rs. 4,57,000/- which was to be drawn on her S.B. A/c. No. 507099389. On receipt of the cheque, on the same day, the complainant presented the cheque for encashment of the amount, specified therein. However, such cheque stood dishonoured for want of sufficient money in the account of the drawer. 7. When such a state of affair was brought to the notice of the accused person, she requested the complainant to present the same after sometime as she was to arrange the money for depositing the same in her Bank A/c. But the accused person requested the complainant to deposit the cheque once again after 19.05.68. As desired by the accused person, the complainant again deposited the cheque to Punjab National Bank, Nagaon Branch on 19.05.08 for collection of amount stated therein. Once again, the cheque was returned by the Indian Bank, Nagaon Branch on the same ground. 8. Since mere was no other way out, the complainant had issued a lawyer notice on the accused person. The accused received the same on 03.06.08. But after receipt of the notice, she replied through her advocate that the complainant/company is not the holder of cheque. Rather the complaint company obtained several blank cheques through Mr. R.K. Dey, Advocate by practising fraud on her and subsequently converted one of those blank cheques to valuable security in order to recover the amount to the tune of Rs. 4,57,000/- from the accused person vide reply letter dated 17.06.08 which is annexed with the complaint petition. 9. Since the accused did not comply with the direction in the demand notice within the statutory period, the complainant was forced to file the aforesaid complaint before the Court of competent jurisdiction seeking prosecution and punishment of the accused person as well as recovery of amount due to the complainant as compensation. 10. On receipt of the complaint, the Court took cognizance of offence U/s. 138 of the N.I. Act and issued process accordingly. 10. On receipt of the complaint, the Court took cognizance of offence U/s. 138 of the N.I. Act and issued process accordingly. In response to the notice issued upon her, the accused entered appearance and denying the allegation contested the case. During the course of trial, the complainant had examined as many as 5 witnesses. The statements of the accused person were recorded. Her plea was of total denial and in support of her case she adduced one defence witness as well. 11. It may be stated that the trial court framed the following points for determination:-- "1. Whether on 19.03.08 the accused person issued a cheque No. 899344 of Indian Bank, Nagaon Branch for Rs. 4,57,000/- in favour of the complainant in discharge of a legally enforceable due? 2. Whether the cheque when presented to the bank for clearance within the period of validity got dishonoured due to insufficient fund? 3. Whether the complainant made demand for payment of Rs. 4,57,000/- by giving notice in writing to the accused person within 30 days of the receipt of information by him from the bank regarding return of the cheque as unpaid ? 4. Whether the accused person failed to make payments within 15 days of the receipt of the said notice?" 12. On conclusion of trial, the learned Trial Court held that complainant could not make out the allegation of offence U/s. 138 of the N.I. Act and as such, it acquitted the accused person of offence U/s. 138 of the N.I. Act. It is that judgment which has been assailed in the present appeal. 13. Opening up the argument on behalf of the appellant/complainant, the learned counsel for the appellant contends that the judgment under challenge is unsustainable since such judgment was rendered in total disregard to the provisions incorporated in section 118,139, 138 of the N.I. Act. Learned counsel for the appellant has pointed out that the accused/respondent had admitted that she had issued some blank signed cheques, however, not in liquidation of any debt but as a security. 14. Learned counsel for the appellant has pointed out that the accused/respondent had admitted that she had issued some blank signed cheques, however, not in liquidation of any debt but as a security. 14. However, according to the complainant, once the accused admitted that she had issued the cheque, then, in the term of law laid down in section 118,139, 138 of the N.I. Act, the Court, unless contrary is proved, is duty bound to entertain presumptions, such as, (a) that the cheque had been made or drawn for consideration (so required under Section 118, (b), that the cheque had been issued for a debt or liability (so required under Section 139, (b) and (c) that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability (so required under Section 138. 15. But in spite of accused/respondent's inability to discharge such burden on her shoulder, the Court below was pleased to acquit the accused person of offence U/s.138 of the N.I. Act on holding that the complainant could not prove the allegation against the accused person which renders the judgment under challenge unsustainable, submits learned counsel for the appellant/complainant. 16. In support of this contention, the learned counsel for the appellant has drawn my attention to the decision of the Apex Court rendered in (a) Hiten P. Dalai v. Bratindranath Banerjee, reported in 2001 STPL (DC) 20 SC, (b) Rangappa v. Sri Mohan, reported in 2010 STPL (DC) 952 SC and (c) K.N. Beena v. Maniyappan, reported in 2001 STPL (DC) 35 SC. 17. The learned counsel for the appellant further submits that the Court below places enormous significance on the use of different in ink in filling up the cheque in question to come to the conclusion that cheque was issued not in liquidation of any debt and in that regard, huge rel2iance was placed on the decision of the Apex Court in the case of C. Antony v. K.G. Raghavan Nair, reported in (2003) 1 SCC1. 18. However, the facts and circumstances of the case in C. Antony (supra) are fundamentally different from the facts and circumstances of the case in hand and as such, reliance on the decision, rendered therein to reject the claim of complainant in the case in hand was wholly uncalled for. 18. However, the facts and circumstances of the case in C. Antony (supra) are fundamentally different from the facts and circumstances of the case in hand and as such, reliance on the decision, rendered therein to reject the claim of complainant in the case in hand was wholly uncalled for. He, therefore, urges this Court to set aside the order of acquittal, rendered in favour of the accused/respondent and convict her of offence U/s. 138 of N.I. Act and punish her suitably with a direction to pay the complainant a suitable amount as compensation on setting aside the judgment in question. 19. On the other hand, the learned counsel appearing for the private respondent/accused person submits that the complainant on practising huge fraud on the accused person obtained some blank cheques as a security for adjustment of amount in the account in her name. But the complainant company fraudulently converted one of such cheques to valuable security and had also used the same as an instrument to draw an amount to the tune of Rs. 4,57,000/- from the accused person. 20. According to the learned counsel for the respondent/accused person, the accused laid evidence before the Court during trial which unmistakably shows that her contention, aforementioned, is genuine and truthful and therefore, she could successfully discharge the burden which law imposes on her. Once she could discharge the burden on her, she cannot be held responsible for committing offence U/s.138 of the N.I. Act and, therefore, the learned trial court had rightly acquitted her of aforementioned offence. 21. I have considered the submissions, advanced by the learned counsel for the parties having regard to the judgment under challenge as well as evidence on record. Before I proceed further, it needs to be known as to what are the presumptions which a Court dealing with negotiable instruments including a cheque needs to take. Such a matter had come up for detailed discussion in the case of Hiten P. Dalal (supra). The relevant part is reproduced below:-- "18. It is unnecessary to consider the various preliminary stages of the trial before the Special Court except to note that charges were framed on 26th August, 1992 by the Special Court against the appellant U/s. 138 of the Negotiable Instruments Act, 1881. "19. The relevant part is reproduced below:-- "18. It is unnecessary to consider the various preliminary stages of the trial before the Special Court except to note that charges were framed on 26th August, 1992 by the Special Court against the appellant U/s. 138 of the Negotiable Instruments Act, 1881. "19. That the four cheques were executed by the appellant in favour of the Standard Chartered Bank (hereinafter referred to as the Bank), has not been denied nor was it in dispute that cheques were dishonoured because of insufficient funds in the appellant's Account with the drawer, viz, Andhra Bank. Because of the admitted execution of four cheques by the appellant, the Bank is entitled to and did in fact relied upon three presumptions in support of its case, namely, U/s. 118, 138 and 139 of the Negotiable Instruments Act. Sec. 118 provides, inter alia, that until contrary is proved it shall be presumed that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted endorsed, negotiated or transferred for consideration. The presumption which arises U/s. 138 provides more specifically that where any cheque drawn by a person on an account for payment of any amount of money for the discharge in whole or in part of any debt or other liability is returned by the drawer bank unpaid, either because of amount of money standing to the credit of that account is insufficient to honour the cheque, such person shall be deemed to have committed an offence and shall be punished with imprisonment for a term which may extend to twice the amount of the cheque, or with both. The nature of the presumption under Section 138 is subject to three conditions specified relating to presentation, giving of the notice and non payment after the receipt of notice by the drawer of the cheque. All three conditions have not been denied in this case. 20. The nature of the presumption under Section 138 is subject to three conditions specified relating to presentation, giving of the notice and non payment after the receipt of notice by the drawer of the cheque. All three conditions have not been denied in this case. 20. The appellants submission that cheques were not drawn for the "discharge in whole or in part of any debt or other liability" is answered by third presumption available to the Bank U/s. 139 of the Negotiable Instruments Act This section provides that " it shall be presumed unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Sec.138 for me discharge, in whole or in part of any debt or other liability". The effect of this presumptions is to place the evidential burden on appellant that the cheque was not received by Bank towards the discharge of liability. 21. Because both sections 138 and 139 require that the Court" shall presume" the liability of the drawer of the cheque for the amount for which the cheques were drawn as noted in State of Madras v. A. Vaidyantha Iyer., AIR 1958 SC 61 , it is obligatory on the court to raise this presumption in every case where the factual basis for the rising of the presumption has been established. "It introduce an exception to the general rule as to the burden of proof in criminal case and shifts the onus to the accused" (ibid). Such presumption is a presumption of law and, as distinguished from the fact which described provisions by which Court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact that unless the accused adduces evidence showing reasonable possibility of non existence of the presumed fact. 22. In the other words, provided the facts required to form the basis of presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. 22. In the other words, provided the facts required to form the basis of presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when," after considering matter before it, the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. (Sec. 3: Evidence Act). Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man". 22. Similar view was rendered in K.N. Beena v. Maniyappan (supra).In the aforesaid case, one Maniyappan was prosecuted allegedly for committing offence U/s.138 of the N.I. Act. The trial court convicted him of offence aforesaid and sentenced him to pay a fund of Rs. 65,000/- in default S.I. for one year. The accused person preferred an appeal before the learned Sessions Judge which was dismissed. 23. Against such concurrent findings of the Courts below, a revision was preferred before the Madras High Court which quashed the judgment of the Courts below on holding that the complainant could not prove that the appellant had issued the cheque. On an appeal before the Apex Court, the Apex court reversed the finding on holding that once the accused is found to have issued the cheque in question, the is bound to entertain the presumption so contemplated in section 118/138/139 of the N.I. Act. The relevant part of the judgment is reproduced below:-. "Para 6. In our view the impugned judgment cannot be sustained at all. The judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of sections 118 and 139 of the Negotiable Instruments Act. Under Section 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument Act (including a cheque) had been made or drawn for consideration. It appears that the learned Judge had lost sight of sections 118 and 139 of the Negotiable Instruments Act. Under Section 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument Act (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This court in the RCR (Crl) 460 SC : 2001 (6) SSC 16 has also taken an identical view". "Para 7. In this case admittedly the 1st Respondent has led no evidence except some formal evidence. The High Court appears to have proceeded on the basis that the denial/averments in his reply dated 21st May, 1993 were sufficient to shift the burden of proof on to the Appellant/complainant to prove that the cheque was issued for a debt or liability. This is an entirely erroneous approach. The 1st Respondent had to prove in the trial by leading cogent evidence, that there was no debt or liability. The 1st Respondent not having let any evidence could not be said to have discharged the burden cast on him. The 1st Respondent not having discharged the burden of proving that the cheque was not issued for a debt or liability, the conviction as awarded by the Magistrate was correct. The High Court erroneously set aside that conviction". 24. In Rangappa (supra), the Apex Court had the occasion to examine the question if the "stop payment" instruction sent by the accused to his Bank in respect of post dated cheque could make him liable to be prosecuted for committing offence under Section 138 of the N.I. Act. Taking into account various provisions in the Act of 1881, the Apex Court answered the aforesaid question in affirmative. The relevant part of the judgment is reproduced below:-- "Para 8. In course of the proceedings before this court, the contentions related to the proper interpretation of Sections 118(a) 138 and 139 of the Act. Taking into account various provisions in the Act of 1881, the Apex Court answered the aforesaid question in affirmative. The relevant part of the judgment is reproduced below:-- "Para 8. In course of the proceedings before this court, the contentions related to the proper interpretation of Sections 118(a) 138 and 139 of the Act. Before addressing them, it would be useful to quote the language of the relevant provisions. 118. Presumptions as to negotiable instruments until the contrary is proved, the following presumptions shall be made. (a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration; 138. Dishonour of cheque for insufficiency, etc of funds in the account- where any cheque drawn by a person on an account maintained by him with a Banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the Bank unpaid, either because of the amount of money standing to the credit of that accused is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that Bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with. Imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both. Provided that noting contained in this section shall apply unless- (a) The cheque has been presented to the Bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. Provided that noting contained in this section shall apply unless- (a) The cheque has been presented to the Bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the Bank regarding the return of the cheque as unpaid; and (c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. (d) Explanation.--For the purpose of this section, 'debt or other liability' means a legally enforceable debt or other liability. 139. Presumption in favour of holder- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Sec. 138 for the discharge, in whole or in part, of any debt, or other liability". 9) Ordinarily in cheque bouncing cases, what Courts have to consider is whether the ingredients of offence enumerated in Sec. 138 of the Act have been made and if so, whether the accused was able to rebut the statutory presumption contemplated by Sec. 139 of the Act. With respect to the facts of the present case, it must be clarified that contrary to the Trial Court's finding, Sec. 138 of the Act can indeed be attracted when the cheque is dishonoured on account of " stop payment" instruction sent by the accused to his Bank in respect of post dated cheque, irrespective of insufficiency of funds in the account. This position was clarified by this Court in Goa Plast (Pvt.) Ltd. v. Chico Ursula D 'Souza, 1 (2003) CCR 410 (SC) : (2003) 3 SCC 232 , wherein it was held: "Chapter XVII containing section 138 to 142 are introduced in the Act by Act 66 of 1988 with the object of inculcating faith in the efficacy of Banking operations and giving credibility to the negotiable instruments in business transactions. These provisions were intended to discourage people from not honouring their commitment by the way of payment through cheques. The Court should lean in favour of an interpretation which serves the object of the statute. A post dated cheque will lose its credibility and acceptability if its payment can be stopped routinely. The purpose of a post dated cheque is to provide some accommodation to the drawer of the cheque. Therefore, it is all the more necessary that the drawer of the cheque should not be allowed to abuse the accommodation given to him by creditor by way of acceptance of a post dated cheque. In view of Sec. 139, it has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut such presumption. This presumption coupled with the object of Chapter XVII of the Act leads to the conclusion that countermanding payment of post dated cheque, a party should not be allowed to get away from the penal provision of Sec. 138. A contrary view would render 138 a dead letter and will provide a handled to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one's own wrong". 25. The decisions, aforementioned, clearly demonstrate that once it is found that the drawer had issued a cheque and if such cheque is presented to the bank as required under the law and if on such presentation, said cheque gets dishonoured, the Court is duty bound to presume (a) that the cheque had been made or drawn for consideration, (b) that the cheque had been issued for a debt or liability and (c) that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. The court needs to retain such presumption unless contrary is proved. 26. Coming back to the case in hand, I have found that there was no dispute over the feet that the accused had signed the cheque in question. Nor was there any dispute over the fact that the cheque aforesaid got dishonoured once it was presented for encashment. The court needs to retain such presumption unless contrary is proved. 26. Coming back to the case in hand, I have found that there was no dispute over the feet that the accused had signed the cheque in question. Nor was there any dispute over the fact that the cheque aforesaid got dishonoured once it was presented for encashment. It is not the case of the parties that the case in hand was not initiated within the time framed fixed under the law. Situation being such, in my considered opinion, in terms of law laid down in Hiten P. Dalal (supra), unless contrary is proved, the Court below was required to entertained the presumption in favour of complainant therein that the cheque was issued in liquidation of debt which the accused had towards the complainant. 27. In trying to discharge such burden, the accused/respondent, however, submits that the later had issued the complainant some signed cheques, of course, only as a security in respect of some collateral transactions between the accused and the complainant, and not in liquidation of debt etc. Unfortunately, the complainant had fraudulently converted one of those cheques to valuable security. Now, let us see how far such a contention stands to reason. In order to make out such a plea, the accused had adduced the evidence of one witness. He is Sri Kulandra Bharali, S.I. of police (DW1). 28. A careful perusal of the evidence, tendered from the side of the accused person, more particularly, evidence of Sri Bharali as well as the G.D. Entry reveals that on 15.3.08, Sri Bharali received an FIR from Bijon Kumar Roy, husband of the accused/respondent. In such an FIR, it was stated that the cheques bearing No. 507087602, 899928, 89982, issued by Indian Bank, were lost. In that connection, Sri Bharali made a G.D. Entry which he proved as Ext. Ka. 29. But then, stand, so taken by the accused person while tendering FIR before the police, was given a clear go by him in the subsequent stage of the case in hand. This is because of the fact that in her reply notice as well as in her statements recorded under Section 313 Cr.P.C., the accused took a very categorical stand that she had delivered to the complainant some signed cheques only as a security towards some collateral transactions which the company later converted to valuable security. 30. This is because of the fact that in her reply notice as well as in her statements recorded under Section 313 Cr.P.C., the accused took a very categorical stand that she had delivered to the complainant some signed cheques only as a security towards some collateral transactions which the company later converted to valuable security. 30. Unfortunately, such drastic changes in the stances of the accused person in different stages of the case in hand instead of advancing cause of defence case demolish it since such revelation only shows that aforesaid claim is based more of lies than on facts. Situation being such, I am unable to accept the plea of the accused person that she had given the complainant some signed cheques as security towards some collateral transactions between the parties which the complainant later converted to valuable security quite fraudulently. Thus, in my considered opinion, such a claim needs to be rejected outright. Resultantly plea aforesaid stands rejected. 31. Even if one assumes for the sake of argument that the cheque in question was issued only as a security, and not in liquidation of a debt or other liability, yet, in view of law laid down in I.C.D.S. Ltd. v. Beena Shabeer & Anr. reported in (2002) 6 SCC 426 , such a plea is required to be rejected. In this context, it needs to be stated that the question whether a guarantor who issued a cheque as a security towards some collateral transactions could be prosecuted in the event of dishonour of such cheque had come up for consideration of the Apex Court in the case of I.C.D.S Ltd. (supra). 32. In I.C.D.S. Ltd. (supra), the husband of Beena Shabeer, (hereinafter referred to as A-2) entered into agreement with the I.C.D.S. Ltd. for the purpose of Maruti Car on hire purchase. Smti Beena Shabeer (hereinafter referred to as A-1) stood guarantor for due repayment of the loan and in that connection issued a post dated cheque in favour of I.C.D.S. Ltd. as well to be drawn on Catholic Syrian Bank Ltd., St. Marry's School, Pattom, Trivandrum. I.C.D.S. Ltd. would be referred to hereinafter as complainant. 33. Default in payment towards the loan having been committed by the borrower, the complainant issued notice requiring the borrower to liquidate the loan which was however not respondent to. Marry's School, Pattom, Trivandrum. I.C.D.S. Ltd. would be referred to hereinafter as complainant. 33. Default in payment towards the loan having been committed by the borrower, the complainant issued notice requiring the borrower to liquidate the loan which was however not respondent to. On following the procedure prescribed under the law, the complainant company file a case U/s. 138 of the N.I. Act before the Add. Chief Judicial Magistrate, Thiruvamanthapuram. On receipt of the complaint, the Magistrate issued process to the accused persons therein. Immediately, thereafter, a proceeding U/s. 482 Cr.P.C. was initiated questioning the complaint and all the proceedings taken there-under. 34. The High Court on receipt of the proceeding and on hearing both the parties came to a categorical finding that being a cheque from guarantor, it could not be said to have been issued for the purpose of discharging any debt or liability and therefore, complaint U/s. 138 of the N.I. Act was quashed. On an appeal, being made, before the Apex Court of the country, the Apex Court negated the finding of the High Court in the following manner:-- "Para-10. The language, however, has been rather specific as regards the intent of the legislature. The commencement of the Section stands with the words " Where any cheque" The above noted three words are of excrement significance, in particular, by reason of the user of the word "any"-the first three words suggest that in fact for whatever reason if a cheque is drawn on any account maintained by him with a banker in favour of another person for the discharge of ay debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the high Court, neither been dealt with or even referred to in the impugned judgment. "11. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the high Court, neither been dealt with or even referred to in the impugned judgment. "11. The issue as regards the coextensive liability of the guarantor and the principle debtor, in our view, is totally out of the purview of Section 138 of the Act, neither the same calls for any discussion therein. The language of the Statute depicts the intent of the law makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provision of Section 138 of the Act: 'Any cheque' and 'other liability' are the two key expressions which stands as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the Statute. Any contra interpretation would defeat the intent of the legislature. The High Court, it seems, got carried away by the issue of grantee and guarantor's liability and thus has overlooked the true intent and purport of Section 138 of the Act. The judgments recorded in the order of the High Court do not have any relevance in the contextual facts and the same thus does not lend any assistance to the contentions raised by the respondents". 35. The decision rendered in ICDS Ltd. (supra) has been followed by Kerala High Court in the case of M.A. Mohana Pai v. V.A. Jabbar & Anr. (Crl Appeal No. 348/1996) rendered on 11.06.2004 wherein it was held as follows:-. "1. Reversing the conviction ordered by the Judicial Magistrate of the First Class-II, Kochi, learned II Additional Sessions Judge, Ernakulam acquitted the 1st respondent. Therefore the appellant/complainant has come up with this appeal against the acquittal. The offence alleged are that punishable under Sections 138 of the Negotiable Instruments Act and under Section 420 of the IPC. The subject matter was Ext. P2 cheque dated 5-5-1993 for an amount of Rs. 20,000/- issued by the accused/Ist respondent. When the cheque was presented to the bank, it bounced. The offence alleged are that punishable under Sections 138 of the Negotiable Instruments Act and under Section 420 of the IPC. The subject matter was Ext. P2 cheque dated 5-5-1993 for an amount of Rs. 20,000/- issued by the accused/Ist respondent. When the cheque was presented to the bank, it bounced. So the offence as alleged has been committed by the 1st respondent. Reversal of the conviction is therefore bad; the appellant submits. 2. The finding of the learned Sessions Judge that Ext. P2 cheque was issued as a security and therefore does not attract Section 138, now cannot be accepted in the light of the decision of the Apex Court in I.C.D.S. Ltd. v. Beena Shabeer ( 2002 (3) KLT 218 ). Even a cheque issued by the guarantor to ensure repayment of loan by the principal debtor was found in that case, supported by due consideration and issued to discharge legally enforceable liability to attract the provision in Section 138. Moreover, there was Ext. Pl agreement between the parties with regard to the sale of the bus. The cheque in question was issued with the stipulation in the said agreement that the cheque was issued as a security for the payment of the amount assured in Ext. Pl agreement. It could have been encashed if the assured payment was not made after six months from the date of Ext. P1. Ext. P 1 was dated 27-10-1992. Ext. P2 cheque was dated 5-5-93, after six months from Ext. Pl. When presented, it was not cashed. Therefore, this was a cheque for an amount towards the liability incurred by the 1st respondent/accused. So on merits also the learned II Additional Sessions Judge committed error to reverse the conviction, the counsel submits." 36. Similar view was rendered by Kerala High Court in the case of General Auto Sales V. Vijay Lakshmi D. In (2005) STPL (DC) 216 KAR. Relevant part is reproduced below:-- "8. Even if a blank cheque has be given toward liability or even as security, when the liability is assessed and quantified, if the cheque is filled up and presented to the Bank, the person who had drawn the cheque cannot avoid the criminal liability arising out of Section 138 of the N.I. Act." 37. Relevant part is reproduced below:-- "8. Even if a blank cheque has be given toward liability or even as security, when the liability is assessed and quantified, if the cheque is filled up and presented to the Bank, the person who had drawn the cheque cannot avoid the criminal liability arising out of Section 138 of the N.I. Act." 37. Thus, it is found well apparent that plea that a particular cheque was issued not in liquidation of any debt but as a security towards some collateral transactions between the parties can no longer be accepted as legally tenable prayer in view of decision in ICDS Ltd. (supra). Resultantly, I have no other option but to hold that the plea of the accused person that he had issued the cheque, not in liquidation of any debt, but only as a security towards some collateral transactions could hardly provide any breather to the accused person in a proceeding U/s. 138 of the N.I. Act. 38. The compliant case comes under fire for other reasons. The learned counsel for the accused person also contends that the since complainant claims that as on 18.03.08, the accused owed to it an amount to the tune of Rs. 4,56,689.12p, so, the complainant was duty bound to prove such a claim. But it miserably fails to do so. In that connection, it has been pointed out that the alleged transactions were admittedly transacted, maintained and preserved through computer and therefore, the computer output (computer output means any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer) pertaining to the transaction in question was to have proved in accordance to the law laid down in section 65B of the Evidence Act. 39. However, admittedly, such computer output in question (Ext 5 which is the computer generated copy of the statement of account in the name of the accused person) was not proved by the complainant during the trial as required under the law. Worse still, those outputs were also never made available to the accused person every day as required under the transactions entered into by the parties. Since the computer outputs containing alleged transactions between the parties were not proved in accordance with the prescription of law, it cannot be said that the accused owed the complainant Rs. Worse still, those outputs were also never made available to the accused person every day as required under the transactions entered into by the parties. Since the computer outputs containing alleged transactions between the parties were not proved in accordance with the prescription of law, it cannot be said that the accused owed the complainant Rs. 4,56,689.12p as on 18.03.08. On this count too, according to the learned counsel for the accused person, case of the complainant needs to be dismissed. 40. Before addressing above allegations, it needs to be known the method of proving the computer outputs. One also needs to know if computer output could be proved in the way meant for proving the secondary evidence of ordinary documents. Both those questions come up for consideration of Apex Court of the country in case of Anvar P.V. v. P.K. Basheer, reported in 2014(10) SCALE 660. Answering both the questions in negative, the Hon'ble Apex Court held as follows:-- "Para 9. Section 59 under Part II of the Evidence Act dealing with proof, reads as follows:-- 59. Proof of facts by oral evidence, All facts, except the contents of documents or electronic records, may be proved by oral evidence. "10. Section 65A reads as follows:--65A. Special provisions as to evidence relating to electronic record: The contents of electronic records may be proved in accordance with the provisions of Section 65B. 11. Section 65B reads as follows: 65B. Admissibility of electronic records: (1) Notwithstanding anything contained in this Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer (hereinafter referred to as the computer output) shall be deemed to be also a document, if the conditions mentioned in this section are satisfied in relation to the information and computer in question and shall be admissible in any proceedings, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible. (2) The conditions referred to in Sub-section (1) in respect of a computer output shall be the following namely: (a) The computer output containing the information was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer; (b) During the said period, information of the kind contained in the electronic record or of the kind from which the information so contained is derived was regularly fed into the computer in the ordinary course of the said activities; (c) Throughout the material part of the said period, the computer was operating properly or, if not, then in respect of any period in which it was not operating properly or was out of operation during that part of the period, was not such as to affect the electronic record or the accuracy of its contents; an (d) The information contained in the electronic record reproduces or is derived from such information fed into the computer in the ordinary course of the said activities. 3) Where over any period, the function of storing or processing information for the purposes of any activities regularly carried on over that period as mentioned in Clause (a) of Sub-section (2) was regularly performed by computers, whether- (a) by a combination of computers operating over that period; or (b) by different computer operating in succession over that period; or (c) by different combinations of computers operating in succession over that period; or (d) in any other manner involving the successive operation over that period, in whatever order, of one or more computers and one or more combinations, all the computers used for that purpose during that period shall be treated for the purpose of this section as constituting a single computer, and references in this section to a computer shall be construed accordingly. (4). (4). In any proceedings where it is desired to give a statement in evidence by virtue of this section, a certificate doing any of the following things, that is to say' (a) identifying the electronic record containing the statement and describing the manner in which it was produced; (b) giving such particulars of any device involved in the production of that electronic record as may be appropriate for the purpose of showing that the electronic record was produced by a computer. (c) dealing with any of the matters to which conditions mentioned in Su-section (2) relate, and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate) shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it. For the purpose of this section. (a) Information shall be taken to be supplied to a computer if it is supplied thereto in any appropriate form and whether it is so supplied directly or (with or without human intervention) by means of any appropriate equipment; (b) Whether in the course of activities carried on by any official, information is supplied with a view to its being stored or processed for the purpose of those activities by a computer operated otherwise than in the course of those activities, that information, if duly supplied to that computer, shall be taken to be supplied to it in the course of those activities. (c) A computer output shall be taken to have been produced by a computer whether it was produced by it directly or (with or without human intervention) by means of any appropriate equipment. Explanation: For the purpose of this section any reference to information being derived from other information shall be a reference to its being derived there from by calculation, comparison or any other process. There are the provisions under the Evidence Act relevant to the issue under discussion. 13. Any documentary evidence by way of an electronic record under the Evidence Act, in view of Sec. 59 and 65 A, can be proved only in accordance with the procedure prescribed U/s. 65B. Sec. 65B deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a computer. Any documentary evidence by way of an electronic record under the Evidence Act, in view of Sec. 59 and 65 A, can be proved only in accordance with the procedure prescribed U/s. 65B. Sec. 65B deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a computer. It may be noted that the Sec starts with a non obstante clause. Thus, notwithstanding anything contained in the Evidence Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied or magnetic media produced by a computer shall be deemed to be a document only if the conditions mentioned Under Sub-sec. (2) are satisfied, without further proof or production of the original, The vary admissibility of such a document, i.e. electronic record which is called as computer output, depends on the satisfaction of the four conditions U/s. 65B (2). Following are the specified conditions U/s. 65B (2)of the Evidence Act. a) The computer output containing the information was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer, b) During the said period, information of the kind contained in the electronic record or of the kind from which the information so contained is derived was regularly fed into the computer in the ordinary course of the said activities; c) Throughout the material part of the said period, the computer was operating properly or, if not, then in respect of any period in which it was not operating properly or was out of operation during that part of the period, was not such as to affect the electronic record or the accuracy of its contents; an d) The information contained in the electronic record reproduces or is derived from such information fed into the computer in the ordinary course of the said activities" 40. The above decision very clearly demonstrates that a computer output can be said to have been proved only when the procedures, prescribed in Section 65B of the Evidence Act are rigidly followed and not otherwise." 41. The above decision very clearly demonstrates that a computer output can be said to have been proved only when the procedures, prescribed in Section 65B of the Evidence Act are rigidly followed and not otherwise." 41. Coming back to our case, it is found that the prosecution has produced some computer generated documents but there is admittedly no evidence on record to show that aforesaid computer output was proved in accordance with requirement of Section65B of the Evidence Act. Being so, there cannot be any escape from the conclusion that aforesaid electronic documents were not proved in accordance with law which makes such document inadmissible in law. 42. However, inability of the complainant to prove the transactions specified in Ext. 5 (copy of the statement of account in the name of the accused person) no way affects the outcome of the case in hand. This is because of the fact that the present case rests not on prosecution's proving or not proving computer output. Rather same rests on proving or not proving the issuance of cheque by the accused person, of course, proving of such transactions would have given the prosecution case more and more strength. 43. The learned counsel for the accused person further contends that the accused person had issued several signed cheques as a security in respect of some collateral transactions between the parties. Unfortunately, the complainant had converted those cheques to valuable security most illegally. In support of such contention, it has also been contented that the signature and other handwriting in the cheque in question are admittedly in different inks. 44. According to the learned counsel for the respondent/accused person, the writing in the cheque with different inks raises a serious doubt about the authenticity of the claim of complainant. In support of such contention, the accused/respondent has relied on the decision of the Apex Court in the case of C. Antony v. K.G. Raghavan Nair, reported in (2003) 1 SCC 1 . 45. In the aforesaid case, the complainant had advanced an amount to the tune of Rs. 26,500/- to the accused person towards the expenses of hospital. In satisfaction of such an amount, the accused had issued a cheque for the aforesaid amount which was however dishonoured when presented for encashment of the amount in the cheque. 45. In the aforesaid case, the complainant had advanced an amount to the tune of Rs. 26,500/- to the accused person towards the expenses of hospital. In satisfaction of such an amount, the accused had issued a cheque for the aforesaid amount which was however dishonoured when presented for encashment of the amount in the cheque. The complainant issued a statutory notice, same having been not responded to by the accused person, a complaint was filed against the accused person alleging his committing offence U/s. 138 of the N I. Act. 46. The plea of the accused person was that no cheque was issued by respondent nor was any amount borrowed by him from the complainant. He, however, stated that the cheque in question was a blank cheque issued to one Chandrappa Paniker in October 1985 as a security for future adjustment of any amount, if it due from accused person in a Chit transaction. But Paniker never returned such cheque although Chit transaction was over long before. 47. Said cheque was misused by the complainant in collusion that Paniker. But the learned court below acquitted the accused person holding that accused did not know the appellant personally and he had paid such amount at the instance of the Advocate, namely, Bijoy Kumar. However, the complainant did not examine Bijoy Kumar to prove such fact, and that too, without assigning any reason whatsoever. 48. The learned trial court also dismissed the case on the ground that the claim of the complainant that the accused had filled up the cheque in question and brought to the office of Advocate Bijoy Kumar could not be accepted because different ink was used in filling up of the cheque. The learned trial court held that the case of appellant that he had given signed blank cheque as security was more probable. 49. On an appeal, the High Court reversed the finding and convicted the accused of offence U/s. 138 of N.I. Act. Being aggrieved, the accused approached the Apex Court by way of special leave petition. Allowing the petition, Apex court held as follows:-- "Para-8 the third circumstances relied upon by the trial court is in regard to the difference in the ink found in the body of the cheque as well as in the signature of the appellant.... Being aggrieved, the accused approached the Apex Court by way of special leave petition. Allowing the petition, Apex court held as follows:-- "Para-8 the third circumstances relied upon by the trial court is in regard to the difference in the ink found in the body of the cheque as well as in the signature of the appellant.... The learned Magistrate on perusal of the cheque found that the ink used in the body of the cheque was different from the ink used in the signature of the cheque, therefore, he drew an inference that the case put forth by the respondent is doubtful, hence, could not be accepted. Even in this regard the High Court has failed to apply its mind...." 50. Having regard to the evidence on record, the learned court below found reason to hold that the decision in C. Antony applicable to the case in hand and come to the conclusion that in the fact and circumstances of case in hand, it cannot be said that the complainant had proved the case against the accused person. The relevant part of the judgment is reproduced below:-- "PW 1 deposed that in the cheque i.e. exhibit 2 the handwriting in the words Bonanza Portfolio Ltd. was written by him he deposed that he does not know who else wrote the cheque but the signature was that of the accused person. So, admittedly there is a difference in handwriting in exhibit 2. Learned defence counsel argued that the cheque was not issued in favour of the accused person and exhibit 10 which is the reply notice also states that the cheque was a blank cheque and was issued for purchase of shares but the complainant converted it into valuable security. It is seen that exhibit 2 is proved in original and is a photocopy. Being a photocopy, the difference in the ink could not be made out. But the complainant himself stated that the cheque was written by different hands and the signature being different creates some doubt in the mind of this court regarding the issuance of the cheque by the accused person in discharge of his liabilities. Learned defence counsel argued that there was a difference in the ink used in the cheques. But the complainant himself stated that the cheque was written by different hands and the signature being different creates some doubt in the mind of this court regarding the issuance of the cheque by the accused person in discharge of his liabilities. Learned defence counsel argued that there was a difference in the ink used in the cheques. As the original cheque is not in the case record and in the admission of PW 1 that the cheque contained different handwriting it is presumed that in the cheque there was a difference in the ink used. The Hon'ble Supreme Court in the case of C. Anthony v. K.G. Raghavan Nair cited in (2003) 1 SCC 1 upheld the order of the trial court dismissing the complaint case under section 138 N.I. Act by setting aside the order of conviction passed by the Hon'ble High Court wherein the Hon'ble Apex Court held that.... the third circumstances relied upon by the trial court is in regard to the difference in the ink found in the body of the cheque as well as in the signature of me appellant... The learned Magistrate on perusal of the cheque found that the ink used in the body of the cheque was different from the ink used in the signature of the cheque, therefore, he drew an inference that the case put form by the respondent is doubtful, hence, could not be accepted. Even in this regard the High Court has failed to apply its mind....." In our present case in hand we find that as admitted by PW 1 mere is a difference in the handwriting and as argued by the learned defence counsel that there was a difference in the ink used, exhibit 3 being proved in original, the true colour of the ink could not be ascertained and hence the benefit is given to the accused person in view of the different handwriting in the body of me cheque and me signature. In view of the discussion made above, it is held that the accused person did not issue exhibit 2 to the complainant in discharge of his liabilities". 51. In view of the discussion made above, it is held that the accused person did not issue exhibit 2 to the complainant in discharge of his liabilities". 51. However, as noticed above, the facts and circumstances of the present case are fundamentally different from the facts and circumstances in the reported case and therefore, the decision in C. Antony (supra) has no application to the present case in hand and as such, learned Court below could not placed any reliance on the decision above in acquitting the accused/respondent No. 2 herein of offence U/s. 138 of the N.I. Act." 52. One may note here that learned Magistrate took serious exception in complainant's claiming Rs. 7,17,926.40p as being amount due from the accused person in paragraph 6 of the complaint whereas amount so specified in cheque was Rs. 4,57,000/- only. Such inconsistencies, according to learned Magistrate, also raises serious doubt about the claim of the complainant that as on 18.03.2007, the accused the complainant Rs. 7, 17,926.40p. However, such a conclusion is without any basis since in his complaint, the complainant had claimed Rs. 4,57,000/- only, and not Rs. 7,17,926.40p as stated by the learned Magistrate in the judgment in question. 53. In view of what I have discussed hereinbefore, it is found that the complainant had proved the allegation of offence u/s. 138of the N.I. Act against the accused/respondent No. 2 and she is 4 herefore liable to be convicted and punished under the aforesaid provision of law. 54. Situation being such, the judgment of acquittal rendered in favour of respondent No. 2 herein is found unsustainable and as such, same is liable to be quashed. 55. In the result, appeal is allowed. 56. Consequently, the order of acquittal rendered in favour of accused person stands quashed and the accused stands convicted of offence u/s. 138 of the N.I. Act and is sentenced to S.I. for 1 month for offence u/s. 138 of the N.I. Act. 57. I have also found that it is a case where accused/respondent is required to compensate the complainant/appellant. On considering materials on records, I quantifying such compensation at Rs. 7,00,000/- (Rupees seven lacs only) and same be paid to the appellant/complainant soon after its realisation. 58. 57. I have also found that it is a case where accused/respondent is required to compensate the complainant/appellant. On considering materials on records, I quantifying such compensation at Rs. 7,00,000/- (Rupees seven lacs only) and same be paid to the appellant/complainant soon after its realisation. 58. Further, keeping the observations, made by the Hon'ble Apex Court in Hari Singh v. Sukbir Singh reported in (1988) 4 SCC 551 ,1 further direct the respondent/accused to pay the compensation within a period of 45 days from today, failing which she shall suffer SI for 15 days. 59. The accused is directed to surrender before the Court below immediately to serve out the sentence and to pay the compensation. Return the LCR, forthwith.