A.M. GOPALAN,MANAGING DIRECTOR vs STATE OF KERALA

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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
TH
WEDNESDAY, THE 11 DAY OF NOVEMBER 2026 / 20TH KARTHIKA, 1948
CRL.A NO. 1414 OF 2011
AGAINST THE JUDGMENT DATED 11.06.2010 IN ST NO.153 OF 2007 OF
JUDICIAL MAGISTRATE OF FIRST CLASS,VADAKARA
APPELLANT/COMPLAINANT:
A.M. GOPALAN,MANAGING DIRECTOR
SREE GOKULAM CHIT AND FIANCE CO. (P) LTD., VADAKARA
REPRESENTED BY POWER OF ATTORNEY HOLDER JAYAKUMAR,
S/O.KUTTIKRISHNAKURUP, PEECHAMPARAMBATH HOUSE, CHORODE
AMSOM DESOM, VADAKARA TALUK
BY ADV.SRI.MAHESH V RAMAKRISHNAN
RESPONDENTS/STATE AND ACCUSED:
1 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR,
HIGH COURT OF KERALA,ERNAKULAM, PIN – 682 031
2 ABOOBACKER, S/O.MOOSA
SHAFEER MANZIL, CHERUPARAMBATH HOUSE, ERAMALA P.O.,
VATAKARA TALUK, PIN – 673 501
R1 BY SR.PUBLIC PROSECUTOR SRI.SAJEEV P K
R2 BY ADVS.
SMT.M.MANJU
SRI.K.PRADEEPAN (VENGALAM)
SRI.K.P.PRADEEPAN
SRI.K.R.RANJITH
SRI.R.SUDHISH
THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 03.11.2026,
THE COURT ON 11.11.2026 DELIVERED THE FOLLOWING:

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CR
JUDGMENT
th
Dated this the 11 day of November, 2026
This appeal has been filed under Section 378(4) of the Code of
Criminal Procedure, 1973 (for short, ‘the Cr.P.C.’ hereinafter),
challenging the judgment in S.T.No.153/2007, dated 11.06.2010 on the
files of the Judicial First Class Magistrate Court, Vatakara, at the
instance of the complainant in the said case, arraying the accused as
nd st
the 2 respondent herein and the State of Kerala as the 1 respondent.
2. Heard the learned counsel for the appellant/complainant as
well as the learned Public Prosecutor, in detail. Perused the judgment
and the trial court records.
3. The parties in this appeal will be referred to as ‘the
complainant’ and ‘the accused’ hereinafter.
4. On tracing the genesis of this case, a complaint had been
filed by the complainant before the Judicial First Class Magistrate

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Court, Vatakara on the allegation that the accused had committed
offence punishable under Section 138 of the Negotiable Instruments
Act, 1881 (for short, ‘the NI Act’ hereinafter). The summary of the
allegation is that the accused subscribed a chitty having sala of Rs.3
Lakh on 28.05.2004 and availed the chitty prize amount on
01.09.2006 by auction. But he was not prompt in repaying the chitty
instalments and accordingly, as on 01.08.2006, the amount
accumulated to a sum of Rs.1,83,611/- (Rupees One Lakh Eighty-Three
Thousand Six Hundred and Eleven only) (principal amount is
Rs.1,48,075/- and interest is Rs.35,536/-). The further case of the
complainant is that in discharge of the said sum, the accused issued
cheque dated 01.08.2006 drawn on ICICI Bank, Vatakara branch on
assurance of repayment. But the cheque got dishonoured for want of
funds, and the accused failed to repay the amount even after receipt of
notice.
5. The learned Magistrate took cognizance for the offence

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punishable under Section 138 of the NI Act and opted summary trial
proceedings. During trial, PW1, the power of attorney holder of the
Managing Director of Sree Gokulam Chits and Finance Company was
examined and Exts.P1 to P7 were marked on the side of the
complainant. No defence evidence was adduced.
6. On appreciation of the evidence, the learned Magistrate
acquitted the accused, holding that the accused had succeeded in
probabilising his defence that he had not issued Ext.P1 cheque towards
any legally enforceable debt. The specific contention raised by the
accused before the trial court was that he had issued a blank cheque to
the complainant, when he had joined the chitty, by way of security, and
that he had not issued the cheque in discharge of any debt or liability.
7. The learned counsel for the complainant argued that the
said finding is erroneous. According to him, the evidence of PW1 ought
to have been accepted by the trial court to prove the transaction and
the execution of the cheque for the amount due from the accused

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towards the chitty transaction.
8. Whereas, the learned counsel for the accused submitted
that, in the instant case, no documents were produced to show the
existence of the chitty or the statements of account thereof to establish
the balance amount due as on the date of issuance of the cheque and to
substantiate the liability alleged by the complainant. Therefore, the
verdict is liable to be confirmed.
9. In view of the rival contentions, the points arise for
consideration are:
(i) Whether the learned Magistrate went wrong in
holding that the accused did not commit the
offence punishable under Section 138 of the NI
Act?
(ii) Whether the verdict would require interference?
(iii) The order to be passed?
10. Point Nos.(i) to (iii)
Here, Ext.P7 is the copy of the power of attorney executed

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by A.M. Gopalan, Managing Director of Sree Gokulam Chits & Finance Co.
(P) Ltd. (the complainant), in favour of PW1 authorising him to conduct
the case. At the time of evidence, PW1 filed chief affidavit. He deposed that

he was the power of attorney holder of the complainant
as per Ext.P7.
According to him, the accused joined for a chitty run by the
complainant having sala of Rs.3 Lakh as per chitty No.J2D 129/3. On
01.09.2006, he had auctioned the chitty and thereafter, he failed to
repay the installments of the chitty and accordingly, he had issued
Ext.P1 cheque to the tune of Rs.1,83,611/- (Rupees One Lakh Eighty-
Three Thousand Six Hundred and Eleven only) (Rs.1,48,075/-
towards principal amount and Rs.35,536/- towards interest) and the
said amount was outstanding. He deposed about presentation of the
above cheque for collection, its consequential dishonour, issuance of
legal notice, its acceptance by the accused and failure on the part of the
accused to repay the amount. Apart from Ext.P1 cheque, Ext.P2, the
dishonour memo issued by the ICICI Bank and Ext.P3 dishonour

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memo issued by Federal Bank were tendered in evidence through PW1.
Ext.P4, the copy of lawyer notice, Ext.P5, the postal receipt and Ext.P6,
the acknowledgment card signed by the accused were also let in
evidence through PW1. During cross-examination, his version is that
the chitty prize given to the accused was Rs.2,25,000/- (Rupees Two
Lakh Twenty-Five Thousand only). But, he did not say the exact
amount which had been remitted by the accused towards the chitty
transaction without looking into the accounts. According to him, since
the sala of the chitty was Rs.3 Lakh, the accused should have repaid
the amount in 20 instalments at the rate of Rs.15,000/- (Rupees
Fifteen Thousand only) each. He also agreed to produce the
documents pertaining to the same. He also deposed that he could not
say when and on which date the accused defaulted the amount. He
also did not say when the accused issued Ext.P1 cheque. He added
that the accused verified the accounts and issued Ext.P1 cheque and he
was present at the time of issuance of the cheque. He deposed further

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that another person also accompanied the accused and he had written
the entries in Ext.P1. Even though the signature in Ext.P1 as that of
the accused was denied by the learned counsel for the accused, PW1
given evidence that it was the accused who had written the name and
signature in the cheque.
11. Going by the reasons whereby the learned Magistrate
acquitted the accused, it could be seen that during 313 questioning of
the accused, he had put up a defence that he had joined the chitty and
issued Ext.P1 as a security, but he did not issue Ext.P1 in discharge of
any legally enforceable debt. While addressing the contentions raised
by both sides, it was observed by the learned Magistrate in paragraph
No.6 as under:
“6. ………...In the complaint itself, it is stated that
accused had availed the chit amount by an auction on 1-9-
2006. It is the case of the complainant that after availing
the chit amount, accused defaulted its repayment. On
demand of the complainant, accused issued Ext.P1 cheque
towards that liability. But it is pertinent to note that the

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date of Ext.P1 cheque is 1-8-2006, a date prior to the date of
original debt date. In more specific, accused had availed
the chit amount on 1-9-2006. But towards that debt,
accused issued Ext.P1 cheque on 1-8-2006, prior to the chit
date. It is specific that complainant has not a case that
accused issued Ext.P1 cheque in discharge of any future
liability. If it is so, there is a reasonable doubt arising in the
mind that whether Ext.P1 cheque dated 1-8-2006 had
issued towards a debt arosed on 1-9-2006. In the complaint
itself, and in the affidavit filed by PW1, the cheque date and
the debt date are 1-8-2006 and 1-9-2006 respectively. The
evidence of PW1 is conjunctively existing with the averment
in the complaint. PW1 has also not at all a case that
accused had issued Ext.P1 cheque towards any future debt.
In the cross examination, PW1 admitted that there is a chit
agreement with respect to the original transaction. But he
admitted that the said agreement was not produced before
this court. Further PW1 would not depose in the cross
examination that how many instalments were paid by the
accused towards the liability. In the cross examination, it is
revealed that accused had to repay the chit amount by 20
equal monthly instalments of Rs.15,000/-each. But PW1 in
his cross examination admitted that unless the account is

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verified, he could not say how much amount was repaid by
the accused. Further PW1 admitted in cross examination
that in the year 2006, accused came to the office of the
complainant. After proper verification, accused issued
Ext.P1 cheque. Therefore, from the oral testimony of PW1, it
is understood that accused had issued Ext.P1 cheque after
the chit amount became due. If it is so, the date of Ext.P1
cheque would not be a date prior to the date of original
transaction.”

12. While addressing the reasons by which the learned
Magistrate acquitted the accused, it is discernible that according to
PW1, the accused joined for a chitty, having sala for Rs3 Lakh. But
PW1 deposed that he could not say the details of the chitty transaction
without looking into the records and there was an agreement in this
regard. Going through the records produced by the complainant, the
documents pertaining to the chitty transactions were not produced.
However, the chitty transaction was admitted by the accused. But, his
case is that he did not issue Ext.P1 towards discharge of any legally
enforceable debt. PW1 could not say how much amount was repaid by

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the accused and the instalments actually remitted by the accused.
13. Thus, this is a case wherein the complainant (Mukhtiar)
examined during 2009 could not speak the details of the chitty. Even
assuming the fact that since the accused admitted the chitty
transaction and discharge of the entire liability, the prime question to
be considered is whether the complainant successfully discharged its
initial obligation showing the existence of a legally enforceable debt,
which led to issuance of Ext.P1. Even though the case of the
complainant is that for Rs.1,83,611/- (Rupees One Lakh Eighty-Three
Thousand Six Hundred and Eleven only), cheque was issued on
01.08.2006, in the chief affidavit itself, it is stated that the accused
auctioned his chitty only on 01.09.2006. If so, the very case of the
complainant that for a chitty auctioned on 01.09.2006, the accused
issued Ext.P1 cheque dated 01.08.2006, that too, after arriving the
liability at Rs.1,83,611/- (Rupees One Lakh Eighty-Three Thousand Six
Hundred and Eleven only) is an absolute improbability, and is not

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digestible to prudence. In this context, non-production of the
statements of accounts showing entitlement of the said amount from
the accused, despite non-production of the other documents relating
to the chitty transaction, would become fatal to the complainant. It is
the well settled law that mere tendering of the dishonoured cheque in
evidence by the complainant or his agent would not be sufficient to
hold that the complainant discharged his initial burden. The initial
burden cast upon the complainant includes proof of the transaction
which ushered the issuance of the cheque. It could not be said that
mere tendering of the cheque by itself is sufficient to find discharge of
the initial burden on the part of the complainant, unless the
transaction is fully established in a convincing manner, liable to be
accepted by a court of law. If so, the learned Magistrate is right in
holding that the complainant’s case not proved beyond reasonable
doubts, where the defence case put up by the accused is having force.
Holding so, the verdict impugned is liable to be confirmed.

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In the result, this appeal fails and is dismissed accordingly.
Sd/-
A. BADHARUDEEN
JUDGE
Bb