C. Vincent v. Madhukumar and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE V.G.ARUN** **WEDNESDAY, THE 26TH DAY OF FEBRUARY 2020 / 7TH PHALGUNA, 1941** ## **CRL.A.No.253 OF 2010** **AGAINST THE JUDGMENT IN CRA 1157/2006 DATED 10-12-2009 OF I ADDITIONAL DISTRICT COURT, TRIVANDRUM** ## **PETITIONER/ COMPLAINANT :** **C.VINCENT, ODALVILA PUTHEN VEEDU, ERICHELLOOR DESOM, KARODE, THIRUVANANTHAPURAM.** **BY ADVS. SRI.SUMAN CHAKRAVARTHY SMT.K.R.RIJA** ## **RESPONDENT/ ACCUSED AND STATE :** **1 MADHUKUMAR, S/O.SOMAN, SAJI BHAVAN, AMBALATHUVILA, ARAYYOOR, CHENKAL, NEYYATTINKARA, THIRUVANANTHAPURAM.** **2 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **R1 BY ADVS. SRI.R.BINDU SASTHAMANGALAM SRI.R.JAYAKRISHNAN** **R2 BY SR.PUBLIC PROSECUTOR SRI.B.JAYASURYA** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 26.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **CRL.A.No.253 OF 2010** 2 ## **JUDGMENT** Dated this the 26[th] day of February 2020 The appellant was the complainant in CC.No.24/2005 of the Judicial First Class Magistrate's Court-V, Neyyattinkara. The complaint was filed against the first respondent herein alleging commission of the offence under Section 138 of the Negotiable Instruments Act ('the NI Act', for short). The allegations in the complaint, in brief, are as under :- The accused had borrowed an amount of Rs.2,25,000/- from the complainant. On the complainant demanding for return of the amount, the accused issued Cheque No.161 drawn on the Arayoor Service Co-operative Bank Ltd. The cheque on presentation was dishonoured for insufficiency of funds in the account of the accused. The complainant caused a lawyer notice to be issued, demanding repayment of the amount due to him. The accused accepted the notice and issued a reply, denying the transaction and issuance of the cheque. In his reply, the accused stated that he had borrowed only Rs.10,000/- from the complainant, that too in the year 1998, on condition that the amount would be repaid **CRL.A.No.253 OF 2010** 3 @Rs.50/- per day. While disbursing the amount, the complainant had collected a blank signed cheque as security agreeing to return the cheque on remittance of the last installment. Though the accused had repaid the entire amount, the cheque given as security was not returned and the complainant gave an excuse of the cheque having been misplaced. It is by misusing the cheque that the complaint for Rs.2,25,000/- was filed. 2. In order to prove his case, the complainant examined himself as PW1 and marked Exts.P1 to P7 documents. The accused denied the incriminating circumstances during his questioning under Section 313 Cr.P.C. and stated that he had given the cheque in question as security to his friend John (DW2), from whom he had borrowed an amount of Rs.10,000/-. He further stated that he had repaid the entire amount due to John and requested for return of the cheque. Though John had agreed to return the cheque the next day, the complainant stealthily collected the cheque from John and due to his long standing animosity towards the accused, had instituted the complaint by making entries in the blank signed cheque entrusted with John. In support of his defence, the accused gave evidence as DW1, and examined DWs 2 to 4, **CRL.A.No.253 OF 2010** 4 DWs 2 and 3 being his friends and DW4, the Manager of his Bank through whom Exts.D1 & D2, the account particulars and copy of the cheque return register were marked. The trial court, on appreciation of evidence and on consideration of the contentions, found the accused guilty. The accused was thereupon convicted and sentenced to undergo simple imprisonment for nine months and to pay Rs.2,30,000/- to the complainant as compensation under Section 357 (3) Cr.P.C., with default sentence of simple imprisonment for a further period of three months. 3. In the appeal filed by the accused against the conviction and sentence, the appellate court found the case set up by the complainant to be highly improbable and inconsistent. It was found that the discrepancies in the evidence tendered by the complainant and the lack of material particulars in the complaint, as also the evidence of PW1, made the case advanced by the complainant improbable. Finding that the complainant had failed to prove his case, the appellate court set aside the conviction and sentence imposed by the trial court and acquitted the accused, thereby allowing the appeal. 4. Aggrieved by the appellate judgment the **CRL.A.No.253 OF 2010** 5 complainant has filed the instant appeal. Heard the learned counsel for the appellant and the learned counsel for the first respondent/accused. 5. The learned counsel for the appellant assailed the judgment of the appellate court primarily on the ground that, the accused having admitted issuance of the cheque, though towards discharge of a lesser liability of Rs.10,000/-, the presumption under Section 139 of the NI Act stood attracted, which the accused had failed to rebut. It is contended that even though DW2 was examined in support of the defence version that the cheque entrusted by the accused with DW2 was misused by the complainant, he did not support the version and had stated that he had no transactions with the accused. It is submitted that the minor discrepancies in the evidence of DW1, with respect to the date on which the amount was borrowed and the endorsement of his signature on the cheque return memo, were not sufficient to rebut the presumption under Section 139 of the NI Act. 6. The learned counsel for the first respondent would contend that one of the essential ingredients for attracting the offence under Section 138 of the NI Act ie; notice issued in accordance with the mandate contained under **CRL.A.No.253 OF 2010** 6 Section 138 (b) of the NI Act stipulating that the payee or the holder in due course of the cheque, as the case may be, should make a demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque, was absent in the case. It is contended that the words 'said amount of money' in Section 138(b) is the amount for which the cheque was issued and in the absence of demand for that specific amount in the notice, complaint for an offence under Section 138 would not be maintainable. It is submitted that in Ext. P3 notice there was no demand for payment of the cheque amount. 7. In support of his contention, the learned counsel relied on the decisions of the Hon'ble Supreme Court in **Indira v. Adinarayana [2003 (3) KLT 1042]** and **Rahul Builders v. Arihant Fertilisers and Chemical [2007 (4) KLT 977]** , rendered by the Hon'ble Supreme Court. In **Indira's** case (supra), a common notice was sent demanding payments of amount due from the accused under two cheques. Contention was raised before the Hon'ble Supreme Court that if the demand in the notice is of amounts other than what is covered by the cheque, it would invalidate the notice and consequently the cognizance taken on the complaint, the trial and the **CRL.A.No.253 OF 2010** 7 conviction. Answering the contention, it was held by the Apex Court that in a given case if the consolidated notice is found to provide sufficient information envisaged by the statutory provision and there was a specific demand for payment of the sum covered by the dishonoured cheque, the mere fact that it was a consolidated notice, and/ or that further demands in addition to the statutorily envisaged demand was also found to have been made, may not invalidate the same. But on the facts of that case, it was found that there was no demand for payment of the amount covered by the cheque and on a perusal of the notice it was found that, not only were the cheque amounts different from the alleged loan amounts but the demand made was not of the cheque amounts but of the loan amount and that, in addition, there were other demands as well. The notice was held to be bad as it did not contain any specific demand for payment of the cheque amount. In that context it was held that non-compliance with a specific demand being the incriminating circumstance, which expose a drawer for being proceeded against under Section 138 of the Act, the acquittal of the accused, though on other grounds, need not be interfered. 8. Similar view was taken by the Apex Court in **CRL.A.No.253 OF 2010** 8 **Rahul Builder's** case (supra), wherein the cheque was issued for a sum of Rs.1,00,000/- towards the balance of Rs.8,72,409/outstanding towards the unpaid bills. The demand in the notice, following dishonour of the cheque, was for payment of the pending bills. The notice was found to be vague and capable of two interpretations. It was held that an omnibus notice, without specifying the amount due under the dishonoured cheque would not subserve the requirement of law. 9. The learned counsel for the appellant cited the later decision of the Hon'ble Supreme Court in **Vijay Gopala Lohar v. Pandurang Ramachandra Ghorpade and Another** **[2019 (2) KHC 827]** , wherein, after taking into consideration all the precedents, including the decisions in **Indira** 's and **Rahul Builder** 's cases (supra), the Hon'ble Supreme Court held as follows :- 8. There is no dispute regarding the proposition that the notice issued under S.138 of the NI Act has to be only for the cheque amount and not for any other amount more than the cheque amount. In the judgments referred to above the notice issued under S.138 of the NI Act referred to loan amounts which were much higher than the cheque amounts. Whereas, in the instant case, the loan amount and the cheque amount is the same i.e.Rs.,50,000/-. Therefore, the **CRL.A.No.253 OF 2010** 9 above mentioned judgments cited by the learned counsel for the appellant are not applicable to this case. 10. The facts in **Vijay Gopala Lohar's** case are that an amount of Rs.50,000/- was borrowed by the accused, towards the discharge of which liability, he issued two cheques for the amount of Rs.25,000/- each and issued two notices on the cheques being returned with the endorsement 'funds insufficient'. Though the amount of Rs.25,000/- was mentioned in the notice, there was a reference to the loan amount which had to be returned by the appellant. The trial court held the notices to be defective as the loan amounts were mentioned therein instead of the cheque amount. In appeal, the High Court came to a different conclusion. It was observed that the words 'loan amount' should not have been mentioned in the notice. However, since demand for payment of Rs.50,000/-, which was the cheque amount was made, the requirement under Section 138(b) stood satisfied. 11. In the light of the law as laid down by the Apex Court, it may be apposite to have a scrutiny of Ext.P3, the notice in question. A perusal of Ext.P3 would show that in the notice it has specifically mentioned that the accused had borrowed an amount of Rs.2,25,000/- and on the complainant **CRL.A.No.253 OF 2010** **==> picture [13 x 8] intentionally omitted <==** demanding for repayment of the amount, the accused had issued a cheque for that amount. Under the notice, the demand was made for repayment of the amount due to the complainant along with expenses. Reading of Ext.P3 notice would evidently indicate that the demand is for the amount of Rs.2,50,000/- borrowed by the accused, towards the discharge of which he had issued a cheque for the same amount. As such, I am of the opinion that the dictum laid down by the Apex Court in **Vijay Gopala Lohar** is squarely applicable and that the failure on the part of the complainant to specify the cheque amount in the last portion of the notice, by itself, will not vitiate the notice and the subsequent proceedings. 12. Another reason to reject the challenge against the notice is the manner in which Ext.P7 reply to Ext.P3 notice was worded. In the reply it was categorically stated that the appellant is not liable to pay an amount of Rs.2,25,000/demanded under Ext.P3 notice. Therefore, it is clear that as far as the accused is concerned, he had no doubt regarding the amount which he was called upon to repay under Ext.P3 notice. 13. As far as the inconsistencies in the evidence of PW1 highlighted in the appellate judgment are concerned, the learned counsel for the appellant would submit that merely **CRL.A.No.253 OF 2010** 11 because the complainant had submitted the time at which the amount was advanced to the accused as October 1999 at one place and January, 1999 at another, that will not in any way vitiate the prosecution case. It is pointed out that the complainant had specifically stated 20.01.2000 as the date on which the cheque was issued. It is the further contention of the learned counsel for the appellant that the testimony of PW1 with regard to the endorsement of his signature on the cheque return register, even if inconsistent, will not adversely affect the prosecution case. The learned counsel points out that the accused had come forward with different inconsistent defences, during his 313 Cr.P.C. statement and while tendering evidence as DW1 and that none of the inconsistent versions could be proved by the accused. It is pointed out that even though DW2 was examined in support of the defence version that Ext.P1 cheque was issued as security to DW2 when the accused borrowed an amount of Rs.10,000/- from him and that cheque had been collected by the complainant and utilised for the purpose of persecuting the accused due to his previous animosity, DW2 did not tender evidence in support of the defence put up by the accused and on the other hand had testified of there having been no transaction between the **CRL.A.No.253 OF 2010** 12 ## complainant and DW2. 14. The learned counsel for the first respondent contends that for the purpose of rebuttal of the presumption under Section 139 of the NI Act, the accused need not let in evidence and can rely on the evidence tendered by the complainant or even the circumstances arising during the course of the evidence. In support of this contention, the learned counsel has placed reliance on the decisions of this Court in **Divakaran v. State of Kerala [2016 (4) KLT 233], Ramachandran v. Bhanuvikraman Nair [2017 (4) KLT 576]** . Relying on the cited decisions, it is contended that even if the execution of the cheque has been proved, it is not necessary for the accused to adduce any evidence to rebut the presumption under Section 139 of the NI Act and he can rely on the facts brought out in the evidence of the complainant and may even relying on the inferences that may be taken from the facts and circumstances of the case or the improbabilities in the case. It is submitted that the inconsistencies in the version of PW1 regarding the execution of the cheque and the date on which the amount was originally borrowed by the accused are sufficient to rebut the presumption, if any available. The contention is liable to be rejected for the reason **CRL.A.No.253 OF 2010** 13 that the complainant had specifically stated the date on which the cheque was issued by the accused. The accused in his reply statement admitted of having issued the cheque, though for a lesser amount. In such circumstances, the presumption under Section 139 of the NI Act was attracted and it cannot be rebutted by merely placing reliance on certain inconsistencies in the testimony of the complainant. The burden was heavy on the accused to rebut the presumption by adducing reliable evidence. 15. The next reason stated in the appellate judgment is the incapacity of the complainant to have raised the amount of Rs.2,50,000/- which he had advanced to the accused. The complainant had stated that he had worked abroad for some period of time and had borrowed some amount from his sister and had utilised the amounts in his account for raising the amount of Rs.2,50,000/- advanced to the accused. Section 118(a) of the NI Act stipulates that, until the 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, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration. Therefore, unless the accused **CRL.A.No.253 OF 2010** 14 is able to rebut the presumption, it has to be presumed that Ext.P1 cheque was drawn for consideration. 16. In the absence of cogent evidence, the appellate court could not have come to the conclusion that the complainant did not have the capacity to advance the amount of Rs.2,50,000/-, towards the discharge of which liability the accused had issued Ext.P1 cheque. For the aforementioned reasons, I find it impossible to sustain the impugned judgment. Consequently the appeal is allowed by setting aside the judgment in Crl.A.No.1157/2006 of the Additional Sessions Judge-I, Thiruvananthapuram. Even though I am confirming the conviction entered by the trial court, considering the fact that the transaction is of the year 2000, I am modifying the sentence of imprisonment of nine months to imprisonment till rising of the court. The direction of the trial court, to pay compensation, i.e.Rs.2,30,000/- is retained as such. Sd/- ## **V.G.ARUN, JUDGE** RKM