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2025 DIGILAW 697 (KER)

Abi Abraham v. Kanhangad Rubber Ltd.

2025-03-24

K.BABU

body2025
ORDER : As the subject matter and the parties in these Criminal Revision Petitions are the same, they are being disposed of by this common order. 2. The common revision petitioner in these revision petitions is the accused in C.C.Nos.20, 42 & 72 of 2018 on the file of the Judicial First Class Magistrate Court-III, Hosdurg. The common respondent No.1 - Kanhangad Rubber Ltd., a public limited company, is the complainant. 3. The complainant - Kanhangad Rubber Ltd. filed three complaints against the accused alleging offence punishable under Section 138 of the Negotiable Instruments Act before the Judicial First Class Magistrate Court-III, Hosdurg. 4. The common pleadings in the complaints are as follows:- The complainant is a public limited company established under the Companies Act, 1956. The company is represented by its Managing Director. The Articles of Association of the complainant company authorize and empower the Managing Director to represent the company in all legal matters. The Board of Directors of the company held on 12.08.2016 empowered the Managing Director of the company to initiate legal proceedings against the accused. 5. The accused is the proprietor of M/s.A & J Rubbers, Kannur. The complainant and the accused entered into an unregistered agreement on 1.8.2014, whereby the accused agreed to purchase ammoniated-filled latex from the complainant from 1.8.2014 to 31.12.2015. A sum of Rs.1.37 crores is due from the accused to the complainant. In discharge of his legally enforceable debt, the accused executed 17 post-dated cheque leaves. The present complaints relate to three out of the above-said cheques. C.C.No.72 of 2018 6. The cheque involved in this case is cheque bearing No.224445 dated 8.11.2016 for a sum of Rs.10,00,000/- drawn on the ICICI Bank, Kannur Branch. The complainant presented the cheque for encashment through the Federal Bank, Kanhangad Branch. The cheque was dishonoured on 11.11.2016 for the reason “exceeds arrangements” as there were no sufficient funds in the account of the accused. On 6.12.2016, the complainant caused to issue a registered lawyer’s notice to the accused, calling upon him to return the amount covered by the cheque. The accused received the notice. He did not respond to the same. 7. PWs 1 to 3 were examined, and Exts.P1 to P13 were marked on the side of the complainant. After the closure of the complainant’s evidence, the statement of the accused under Section 313 Cr.P.C . was recorded. The accused received the notice. He did not respond to the same. 7. PWs 1 to 3 were examined, and Exts.P1 to P13 were marked on the side of the complainant. After the closure of the complainant’s evidence, the statement of the accused under Section 313 Cr.P.C . was recorded. He pleaded that the cheque he gave as security was misused by the complainant. However, no defence evidence was adduced. C.C.No.20/2018 8. The complainant presented the cheque bearing No.224438 dated 1.1.2016 issued by the accused for Rs.10,00,000/- drawn on the ICICI Bank, Kannur Branch for encashment through the Federal Bank, Kanhangad Branch. It was dishonoured on 5.1.2016 for the reason “funds insufficient”. On 25.01.2016, the complainant caused to issue a registered lawyer’s notice to the accused, calling upon him to pay the amount covered by the cheque. Though the accused received the notice, he did not respond to the same. 9. PWs 1 to 3 were examined, and Exts.P1 to P14 were marked on the side of the complainant. After the closure of the complainant’s evidence, the statement of the accused under Section 313 Cr.P.C . was recorded. He pleaded that the cheque he gave as security was misused by the complainant. However, no defence evidence was adduced. C.C.No.42/2018 10. The cheque involved in this case is cheque bearing No.224444 dated 08.06.2016 for a sum of Rs.10,00,000/- drawn on the ICICI Bank, Kannur Branch. The complainant presented the cheque for encashment through the Federal Bank, Kanhangad Branch. The cheque was dishonoured on 10.06.2016 for the reason “funds insufficient” as there were no sufficient funds in the account of the accused. On 30.06.2016, the complainant caused to issue a registered lawyer’s notice to the accused, calling upon him to return the amount covered by the cheque. The accused received the notice. He did not respond to the same. 11. PWs 1 to 3 were examined, and Exts.P1 to P15 were marked on the side of the complainant. After the closure of the complainant’s evidence, the statement of the accused under Section 313 Cr.P.C . was recorded. He pleaded that the complainant misused the cheque he gave as security. However, no defence evidence was adduced. 12. The trial court found the accused guilty of the offence punishable under Section 138 of the Negotiable Instruments Act. The accused admitted the execution of the agreement dated 1.8.2014 with the complainant. was recorded. He pleaded that the complainant misused the cheque he gave as security. However, no defence evidence was adduced. 12. The trial court found the accused guilty of the offence punishable under Section 138 of the Negotiable Instruments Act. The accused admitted the execution of the agreement dated 1.8.2014 with the complainant. The cheques were issued as security. The complainant misused the cheques for unlawful gain. 13. The trial court convicted the accused under Section 138 of the Negotiable Instruments Act in all the three cases and sentenced to undergo simple imprisonment for a period of six months each and to pay a compensation of Rs.10,00,000/- each under Section 357(3) of the Cr.P.C . The accused challenged the judgments of conviction and sentence by the trial court before the Sessions Court, Kasaragod, which confirmed the conviction and sentence in the three cases. Evidence 14. The Managing Director of the complainant company gave evidence as PW1. He filed an affidavit in lieu of chief examination. In the chief affidavit, he stated that the Articles of Association of the Company authorize and empower the Managing Director to represent the company in all legal matters and to engage lawyers and attorneys to file suits and initiate legal proceedings on behalf of the company. He deposed that the Board of Directors of the company held on 10.12.2018 has also empowered him to initiate legal proceedings against the accused. PW1 gave evidence that on 1.8.2014, the accused and the complainant entered into an agreement whereby the accused/purchaser agreed to purchase ammoniated filled latex from the company for a period from 1.8.2014 to 31.7.2015 . PW1 further stated that on 10.9.2015, the accused, in discharge of a liability of Rs.1.37 crores, executed and issued 13 cheque leaves. 15. The complainant presented the cheques for encashment. He stated that cheque Nos.224438, 224444 and 224445 were dishonoured on 05.01.2016, 10.06.2016 and 11.11.2016, respectively. PW1 further stated that lawyer’s notices were caused to issue to the accused. The accused received the notices but neither replied nor discharged the liability covered by the cheques. 16. PW2 was the Managing Director of the company for the period from 2010 to 2015. The agreement dated 1.8.2014, whereby the accused agreed to purchase ammoniated filled latex, was executed during the tenure of PW2. The agreement was proved through PW2. The accused received the notices but neither replied nor discharged the liability covered by the cheques. 16. PW2 was the Managing Director of the company for the period from 2010 to 2015. The agreement dated 1.8.2014, whereby the accused agreed to purchase ammoniated filled latex, was executed during the tenure of PW2. The agreement was proved through PW2. He gave evidence that towards the purchase of latex, a sum of Rs.1,00,00,000/- and a sum between Rs.30 Lakhs and Rs.40 Lakhs were due to the company from the accused. PW2 stated that he had repeatedly contacted the accused and requested him to clear the liability. According to PW2, thereafter, the accused came to the office of the company and executed the cheques in question. The accused executed the cheques in the presence of PW2. 17. PW3 was a Development Officer of the Rubber Board. He worked as the Manager of the complainant company during the period 2009-2012 and 2015-2016 and as the Managing Director of the company from 2016 to 2018. PW3 personally knew the accused. A sum of Rs.1.37 Crores was due to the company from the accused towards the purchase of latex. He stated that the accused executed 13 cheques towards the liability. The oral evidence of PWs1 to 3 is corroborated by the cheques marked as Ext.P4 in the Calendar Cases, the agreement dated 1.8.2014 and the statutory notices issued by the complainant. The accused has not disputed the signatures and the writings in the cheques. He has not disputed the execution of the agreement dated 1.8.2014. His only contention is that there is no legally enforceable debt, as pleaded by the complainant. The complainant has produced the ledger extracts maintained by the company to establish the liability. The accused has issued a confirmation letter in favour of the company admitting the liability. The accused has not disputed any of the documents produced by the complainant. 18. The trial Court and the Sessions Court concurrently found that the complainant established the execution of the cheques. 19. I have gone through the pleadings in the complaints, the oral evidence adduced by PWs 1 to 3 and the documents, including the cheques in dispute, the agreement dated 1.8.2014, copy of the ledger extracts, the confirmation letters and the lawyer's notices. 19. I have gone through the pleadings in the complaints, the oral evidence adduced by PWs 1 to 3 and the documents, including the cheques in dispute, the agreement dated 1.8.2014, copy of the ledger extracts, the confirmation letters and the lawyer's notices. I find no irregularity in the finding of the trial court and the Sessions Court that the complainant established the execution of the cheques. Once the complainant has established the execution of the cheque, a presumption is drawn in favour of the complainant that the cheque was issued by the accused in the discharge of a debt by virtue of the presumptive device under Section 139 of the Act. Now, the burden shifts on the accused to rebut the mandatory presumption by showing that the cheque was not issued towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed facts in favour of the complainant will have to be taken to be true without expecting the complainant to do anything further. (Vide: Rajesh Jain v. Ajay Singh, [ 2023 (6) KHC 391 (SC)] 20. The challenge of the accused is on two counts. The first challenge is that the complainant has not proved that the person representing the complainant company is a person duly authorized to represent it. Relying on TRL Krosaki Refractories Ltd. v. SMS Asia Private Limited and Ors. ( (MANU/SC/0228/2022) ) the accused submitted that if the payee is a company, necessarily the complaint should be filed in the name of the company, and the company is to be represented by an authorized person empowered to represent it by way of a resolution or a power of attorney. 21. In the present case, the complainant is the company itself. The company is represented by its Managing Director. The complainant specifically pleaded that the Articles of Association of the complainant company authorize and empower the Managing Director to represent all legal matters and to initiate legal proceedings on behalf of the company. The company further pleaded that the Board of Directors of the company held on 12.8.2016 empowered the Managing Director of the company to initiate legal proceedings against the accused. PW1 gave evidence in support of these pleadings in the complaints. The payee is the company itself. The company further pleaded that the Board of Directors of the company held on 12.8.2016 empowered the Managing Director of the company to initiate legal proceedings against the accused. PW1 gave evidence in support of these pleadings in the complaints. The payee is the company itself. In TRL Krosaki Refractories Ltd. (supra), the Supreme Court held that when a company is the payee of the cheque based on which a complaint is filed under Section 138 of the N.I. Act, the complainant necessarily should be the company, which would be represented by an employee who is authorized. In the present case, the complainant is the company itself. The company has been represented by the Managing Director, who is the authorized person. Therefore, the mandate of Section 142 of the N.I. Act has been satisfactorily complied with. Therefore, this challenge falls to the ground. 22. The second challenge of the accused is that the witnesses who gave oral evidence had no direct knowledge regarding the transactions. I am unable to accept this contention. PWs 2 and 3, the employees of the company during the relevant period, specifically stated about the liability of the accused towards the company. They also gave evidence in support of the case of the complainant that the accused executed the cheques in dispute. 23. PW2 specifically stated that the accused executed the cheques in his presence. PW3 also supported the case of the complainant. The contention of the learned counsel for the accused relying on Gujarat Guardian Limited (M/s.) v. George Kurian, ( 2015 (2) KHC 516 ) is not applicable to the present facts. The learned counsel for the accused highlighted another discrepancy in the pleadings and the evidence regarding the number of cheques executed. In the complaint, the complainant pleaded that the accused executed 17 cheques. While giving evidence, PWs 2 and 3 stated that the accused executed only 13 cheques. This discrepancy will not affect the merit of the case of the complainant as the complainant has successfully proved the liability and execution of the cheques. 24. The only question to be considered is whether the accused discharged his evidential burden to rebut the mandatory presumption. True that the standard of proof to discharge this evidential burden must meet only the standard of preponderance of probabilities, similar to a defendant in a civil proceeding. 24. The only question to be considered is whether the accused discharged his evidential burden to rebut the mandatory presumption. True that the standard of proof to discharge this evidential burden must meet only the standard of preponderance of probabilities, similar to a defendant in a civil proceeding. To rebut the presumption, the accused has to raise a probable defence. The accused is left with two options. The first option proving that the debt or liability does not exist, for which he has to lead evidence or bring out circumstances that the cheque was not issued in discharge of a debt or liability. The second option is to prove the non-existence of the debt or liability by preponderance of probabilities by referring to the particular circumstance of the case. To discharge this evidential burden, the accused can rely on the evidence of the complainant and all other circumstances brought out in evidence. The evidence need not even be direct. It may comprise circumstantial evidence or presumption of law or fact. In the present case, the accused has not placed any material to the satisfaction of the court that on a preponderance of probabilities, there existed no debt or liability in the manner pleaded in the complaint, demand notice, affidavit, evidence, etc. 25. I have carefully gone through the pleadings and evidence. Nothing has been elicited in the cross-examination of PWs 1 to 3 to raise any suspicion in the case set up by the complainant other than a minor inconsistency regarding the number of cheques issued. The case of the complainant company has been consistent throughout as is evident from the pleadings in the complaint, demand notice, affidavit and the evidence adduced. 26. The accused miserably failed to discharge his evidential burden. Therefore, the fact that the cheques issued in discharge of a debt or liability will have to be taken to be proved with the aid of the presumption under Section 139 of the N.I. Act without requiring anything more from the complainant. 27. The challenge herein is on the concurrent findings recorded by the trial court and the Sessions Court. Therefore, the fact that the cheques issued in discharge of a debt or liability will have to be taken to be proved with the aid of the presumption under Section 139 of the N.I. Act without requiring anything more from the complainant. 27. The challenge herein is on the concurrent findings recorded by the trial court and the Sessions Court. Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable, or there is non-consideration of any relevant material, or there is palpable misreading of records, the Revisional Court is not justified in setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional jurisdiction is to preserve the power of the court to do justice in accordance with the principles of criminal jurisprudence. The revisional power of the court under Sections 397 to 401 Cr.P.C is not to be equated with that of an appeal. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the courts may not interfere with the decision in exercise of their revisional jurisdiction. {Vide: Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke , [ (2015) 3 SCC 123 ] , Munna Devi v. State of Rajasthan & Anr, [ (2001) 9 SCC 631 )] and Asian Resurfacing of Road Agency Pvt. Ltd. v. Central Bureau of Investigation , [ (2018) 16 SCC 299 )] } 28. This Court is of the view that the judgments impugned are not affected by any patent error of jurisdiction. All the challenges in these revision petitions, therefore, fail. This Court fails to find that the impugned orders are untenable in law or grossly erroneous or unreasonable. The Criminal Revision Petitions stand dismissed.