B.Subhagan v. State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** ## **THE HONOURABLE MR. JUSTICE P.D.RAJAN** **FRIDAY, THE 26TH DAY OF FEBRUARY 2016/7TH PHALGUNA, 1937** ## **CRL.A.No. 2153 of 2004** ## **---------------------------** ## **AGAINST THE ORDER/JUDGMENT IN Crl.L.P. 255/2004 of HIGH COURT OF KERALA DATED 31-05-2004** **AGAINST THE JUDGMENT IN CC 21/2000 of C.J.M.,KOLLAM DATED 20-05-2003** ## **APPELLANT/COMPLAINANT:** **----------------------------------------** **B.SUBHAGAN, ARUNTHANIYIL HOUSE, PANTHRANDUMURI, THATTAMALA P.O., KOLLAM-20.** ## **BY ADV. SRI.AJAIKUMAR. G** ## **RESPONDENTS/STATE AND THE ACCUSED PERSON:** **---------------------------------------------------------------------------** **1. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** ## **2. S.SUNIL,** **S/O. SUGATHAN V., KAMMANKUDIYILVEEDU, THATTAMALA CHERI, THATTAMALA P.O., KOLLAM 20.** **BY PUBLIC PROSECUTOR SRI.N.SURESH** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 26-02-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **rmm** ## **P.D. RAJAN, J. -------------------------------Crl. Appeal No.2153 of 2004 ---------------------------------Dated this the 26[th] day of February, 2016** ## **J U D G M E N T** This appeal is preferred by the complainant against the judgment of acquittal in C.C. No.21 of 2000 of the Chief Judicial Magistrate, Kollam. The above case was filed under Sec.138 of the Negotiable Instrument Act (hereinafter referred to as 'the Act' for short) against the appellant on the allegation that on 06.06.1999, the accused borrowed a sum of Rs.5,00,000/- from the complainant and in discharge of that debt, he issued Ext.P1 cheque and when the cheque was presented for encashment, it was dishonoured for the reason 'funds insufficient'. The appellant issued a lawyer notice demanding the payment of the due amount by giving a notice in writing. After receipt of the notice, the accused/respondent issued a reply notice. In the circumstances, the above complaint was filed in the Chief Judicial Magistrate Court, Kollam. 2. During trial, the complainant was examined Crl. Appeal No.2153 of 2004 2 as PW1 and his documents were marked as Exts.P1 to P10. The incriminating circumstances were denied by the accused while questioning him under Sec.330 of the Code of Criminal Procedure. He stated that he disputed the truthfulness of the transaction and contended that the complainant obtained a blank cheque forcefully from his father who had financial transaction with him and by misusing that cheque, he foisted a false case. In support of that contention, DW1 was examined and Ext.D1 was marked from his side. The learned Chief Judicial Magistrate, after analysing the oral evidence, found that no offence under Sec.138 of the NI Act has been committed by the accused and he was acquitted thereunder, under Sec.255(1) of the Code of Criminal Procedure. Being aggrieved by that, he preferred this appeal. 3. Heard the learned counsel for the appellant and the learned Public Prosecutor. There was no appearance on the side of the 2[nd] respondent. 4. The learned counsel appearing for the Crl. Appeal No.2153 of 2004 3 appellant contended that the appellant proved the facts attracting the offence under Sec.138 of the NI Act. The trial court failed to appreciate the materials placed before court. A faulty appreciation of evidence was recorded, therefore interference is necessary. 5. The appellant's case in the trial court is that the 2[nd] respondent borrowed a sum of Rs.5,00,000/- and in discharge of that debt, he issued Ext.P1 cheque. When Ext.P1 was presented for encashment, it was dishonoured for the reason of funds insufficient. Ext.P2 is the dishonour memo. Appellant demanded the due amount by giving a notice in writing. Ext.P3 is the copy of the lawyer notice. Ext. P4 is the postal acknowledgment card and Ext.P5 is the postal receipt. The 2[nd] respondent issued Ext.P6 reply notice. Ext.P7 is the copy of the cheque issue register, Ext.P8 is the copy of the SB account register and Ext.P9 is the copy of the account opening form. 6. I have perused Ext.P7. As per Ext.P7, the 2[nd] respondent has obtained the amount on 07.01.1998 and issued cheque leaf Numbers from 5841 to 5850. On Crl. Appeal No.2153 of 2004 4 16.07.1999, the cheque was presented for encashment. But, on that date, the balance was only Rs.1,166/- in the SB account of the 2[nd] respondent. In Ext.P8 also the balance was insufficient to honour the cheque. A perusal of the evidence of PW1 and the documentary evidence, it is found that when Ext.P1 was presented for encashment it was dishonoured for the reason 'funds insufficient'. When a cheque is dishonorued for the reason of funds insufficient, the presumption under Sec.139 of the NI Act can be drawn in favour of the holder of the cheque. Sec.139 reads as follows: “ 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.” 7. Apex Court in **Beena v. Muniappan (AIR 2001 SC 2995) and Narayana Menon v. State of Kerala 2006 (3) KLT 404 (SC)** held that the presumption is rebuttable. In **Anil Hada v. Indian Acrylic Ltd. [AIR 2000 SC 145]** it was held as follows: ## Crl. Appeal No.2153 of 2004 5 “ There is a legal presumption that the cheque was issued for discharging an antecedent liability. The aforesaid presumption is in favour of the holder of the cheque. It is not mentioned in the section that the said presumption would operate only against the drawer. After all a presumption is only for casting the burden of proof as to who should adduce evidence in a case. It is open to any one of the accused to adduce evidence to rebut the said presumption. In a prosecution where both the drawer company and its office-bearers are arrayed as accused, and if the drawer company does not choose to adduce any rebuttal evidence it is open to the other office-bearers-accused to adduce such rebuttal evidence. If that be so, even in a case where the drawer company is not made an accused but the office-bearers of the company alone are made the accused such office-bearers-accused are well within their rights to adduce rebuttal evidence to establish that the company did not issue the cheque towards any antecedent liability.” 8. Therefore, it is the primary responsibility of the 2[nd] respondent to rebut the presumption. He examined DW1 who deposed that he had financial transaction with PW1 and borrowed the amount on various occasions from PW1. He repaid the entire amount. At the time of borrowal, appellant demanded ## Crl. Appeal No.2153 of 2004 6 cheque leaf and he entrusted the cheque leaf of his son. Ext.P1 is the cheque. When he demanded to return the cheque leaf the appellant was reluctant to return that cheque. In the circumstance, he filed a complaint before the Dy.S.P. Kollam. Ext.D1 is the copy of the petition. The trial court, on the basis of the defence contention, ascertained the capacity of the appellant to pay a huge sum of Rs.5,00,000/-. It is clear from the oral evidence that the evidence is lacking for reaching a conclusion that the appellant has sufficient amount to lend Rs.5,00,000/to the 2[nd] respondent. In cross examination, PW1 admitted that the 2[nd] respondent's father had financial transaction with him. He also admitted that on 13.07.1999, the father of the 2[nd] respondent repaid Rs.1,00,000/- towards the debt. The 2[nd] respondent disputed the source of income and contended that the appellant has no sufficient means to pay Rs.5,00,000/- in one lot. PW1, in his evidence deposed that, on 06.06.1999, the 2[nd] respondent came with his father and paid the amount by cash. In May 1999, he had withdrawn ## Crl. Appeal No.2153 of 2004 7 Rs.2,00,000/- from Canara bank, Thattamala branch. One week before the transaction, he borrowed a sum of Rs.1,00,000/- from one C.S. Sugathan, Vembalakkara. He borrowed Rs.50,000/- from Sugathan Kakkady. He also borrowed another sum of Rs.70,000/- from a teacher, Thattamala and also Rs.25,000/- from another Sugathan Naranath. The balance amount was raised from his account. Even though he stated so, no documentary evidence has been adduced from the Canara bank, Thattamala to prove that fact. He also did not examine the person who lend money to the appellant. The examination of such witness is a statutory requirement when the 2[nd] respondent disputes the source of income. ## 9. Apex Court in **John K. Abraham v. Simon** ## **C. Abraham [ 2014 (1) KLT 90 (SC)]** held as follows. “ It has to be stated that in order to draw the presumption under Sec.118 read along with 139 of the Negotiable Instruments Act, the burden was heavily upon the complainant to have shown that he had required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said Crl. Appeal No.2153 of 2004 8 payment advanced was true and that the accused was bound to make the payment as had been agreed while issuing the cheque in favour of the complainant.” 10. Therefore, the presumption under Sec.139 of the NI Act could be drawn only when the appellants prove that there was a debt or liability existing between them and the cheque was issued in discharge of that debt. Therefore, drawing presumption under Secs.118 and 139 of the NI Act, the burden is heavy upon the complainant/appellant. He has to show that he has enough funds for advancing the money to the accused on the date of transaction. When issuance of the cheque in support of the payment was true and the appellant had sufficient amount to pay to the accused, it is upon the complainant to decide to pay the amount or not, then only, the statutory requirements of rebuttal of presumption arises. The serious infirmity in connection with the evidence of the complainant will strike the root of the complaint under Sec.138 of the NI Act, which was rightly appreciated by the learned Chief Judicial Crl. Appeal No.2153 of 2004 9 Magistrate. Therefore, there is no illegality in the finding rendered by the learned Magistrate. In the result, the finding rendered by the learned Magistrate do not suffer from any illegality. There is no merit in this appeal and it is dismissed accordingly. Sd/- **P.D. RAJAN, JUDGE** NS/04/03/2016 / True Copy / P.A. To Judge