High Court of KeralaSingle Judge2015-09-03Crl. Revision Petition is disposed accordingly.

Dr. K. V. Hameed v. State of Kerala

Case / Petition Number:Crl.R.P.No.1500/2008

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. D. Rajan
Judgment Date: 2015-09-03
Court Decision / Holding: The court upheld the conviction under Section 138 NI Act, finding no material alteration proven and that the initial presumption under Section 139 favours the holder, which the accused failed to rebut. However, the sentence was modified to imprisonment till rising of the Court and payment of compensation of Rs. 2,50,000 under Section 357(3) Cr.P.C., with conditions for deposit, disbursement to PW1, and surrender within 30 days.
Final Disposition: Crl. Revision Petition is disposed accordingly.

Parties to the Case

Appellants / Petitioners

Dr. K.V. Hameed

Respondents

The State of Kerala
V APPUKUTTAN MASTER, RTD. HEAD MASTER, INDU NIVAS, P.O. PULICKAL MALAPPURAM DISTRICT.

Legal Representation & Advocates

Counsels for Petitioners

• Sri. Sunil V. Mohammed

Counsels for Respondents

• Public Prosecutor, High Court of Kerala, Ernakulam
• Sri. T. Resmi Damodaran

Case Synopsis & Summary

This is a Criminal Revision Petition filed by Dr. K. V. Hameed challenging a conviction under Section 138 of the Negotiable Instruments Act (NI Act), affirmed by the Sessions Court at Kozhikode, with sentence modified by the appellate court. The underlying facts stem from a dishonoured cheque issued by the petitioner in 2000 to discharge a debt. The cheque (Ext.P1) was dishonoured for funds insufficient. The complainant served a legal notice and filed a complaint under NI Act; the trial court convicted the petitioner. The petitioner contended that Ext.P1 bears a material alteration (the year 2000 appears with an un-attested scoreline adding a “19” in front of the year), and questioned the source of income to negate the presumption under Section 118. The court discussed the statutory conditions for Section 138, the presumption under Section 139 in favor of the holder, and the need for the accused to rebut that presumption. Relying on Supreme Court authorities such as Rangappa v. Mohan and Hiten P. Dalal, Beena Muniappan, and Narayana Menon, the High Court held that the initial presumption favors the complainant and that the accused failed to rebut it. Consequently, the conviction stands, but the sentence is modified to imprisonment till rising of the Court and compensation of Rs. 2,50,000 under Section 357(3) Cr.P.C., with deposit and disbursement procedures and a 30-day surrender period. The revision petition is disposed accordingly.

Provisions of Law Cited

Negotiable Instruments Act, Section 138Section 118 NI ActSection 139 NI ActSection 357(3) Cr.P.C.

Legal Doctrines & Maxims

Presumption in favour of the holder under Section 139 NI Act
Rebuttable presumption under Section 139 NI Act
Burden on the accused to rebut the presumption
Material alteration as a potential ground of attack on a cheque

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that Ext.P1 bears a material alteration—year '2000' appears with two digits '19' scored in front without attestation—creating a ground to challenge the cheque’s validity. He argues lack of proof of source of income and contends that Section 118 NI Act is not satisfied, while the presumption under Section 139 should not stand if the debt origin is not established. He asserts that the alteration and income source issues undermine the prosecution’s case and the presumption in favour of the holder.

Contentions of Respondents

The respondents relying on the presumption under Section 139 NI Act contends that the cheque was issued in discharge of a debt; Ext.P2 dishonour memo and Exts.P3–P5 confirm notice and demand. They argue that once funds-insufficient dishonour is established, there is a statutory presumption of a debt or liability; the burden lies on the accused to rebut; the source of income is not a prerequisite under Sections 118, 138, 139 NI Act. The equitable remedy of compensation under 357(3) Cr.P.C. was sought to be ensured.

Cited Precedents (4)

Case Name	Citation	Treatment	Explanation
Rangappa v. Sri Mohan	2010(11) SCC 441	Positive	Cited for the principle of presumption under Section 139 NI Act in favour of the holder and the requirement that the accused must rebut this presumption; forms the basis for the trial court’s approach to proof.
Hiten P. Dalal v. Apex Bratindranath Banerjee	AIR 2001 SC 3879	Positive	Cited as establishing that there is an initial presumption in favour of the holder and that the burden shifts to the accused to rebut; supports the decision to rely on presumption under 139.
Beena v. Muniappan	AIR 2001 SC 2995	Positive	Cited to reinforce the existence and scope of presumptions under NI Act sections and the burden on the accused to rebut.
Narayana Menon v. State of Kerala	2006(3) KLT 404 (SC)	Positive	Cited for the principle that the initial presumption under Sections 139/138 NI Act applies and that the accused must rebut the presumption; used to support the court’s reasoning.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE P.D.RAJAN** **THURSDAY, THE 3RD DAY OF SEPTEMBER 2015/12TH BHADRA, 1937** **Crl.Rev.Pet.No. 1500 of 2008 ( )** **--------------------------------AGAINST THE JUDGMENT IN CRL.APPEAL NO.313/2007 of SESSIONS COURT,KOZHIKODE DATED 21-02-2008 AGAINST THE JUDGMENT IN ST 165/2000 of C.J.M.,KOZHIKODE DATED 22-03-2007.** ## **REVISION PETITIONER(S)/APPELLANT/ACCUSED:** **--------------------------------------------** **DR.K.V.HAMEED, PROPRIETOR, COMMUNITY DRUGS SERVICE KUDUNGHOOKARAN HOUSE, P.O. FEROKE PETTA KOZHIKODE DISTRICT.** **BY ADV. SRI.SUNIL V.MOHAMMED** ## **RESPONDENT(S/RESPONDENTS/STATE/COMPLAINANT:** **-------------------------------------------** **1. THE STATE OF KERALA** **PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM** **2. V.APPUKUTTAN MASTER, RTD. HEAD MASTER, INDU NIVAS, P.O. PULICKAL MALAPPURAM DISTRICT.** **R,2 BY ADV. SMT.T.RESMI DAMODARAN BY PUBLIC PROSECUTOR SRI. DHANESH MATHEW MANJOORAN** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 03-09-2015, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **acd** ## **P.D. RAJAN, J.** ------------------------------------------Crl.R.P.No.1500 of 2008 ---------------------------------------------Dated this the 3[rd] day of September, 2015 ## **ORDER** The revision petitioner, who is the appellant in Crl.Appeal No.313/2007 on the file of Sessions Court, Kozhikode, challenges the concurrent finding of conviction u/s.138 of the Negotiable Instruments Act (hereinafter referred to as 'N.I.Act'). He was convicted and sentenced in S.T.No.165/2000 on the file of Chief Judicial Magistrate, Kozhikode. The above conviction was confirmed by the appellate Court, but sentence was modified as imprisonment for one month and to pay fine of 2,60,000/-, in default of₹ payment of fine, simple imprisonment for three months. It was also directed that if the amount is released, 2,55,000/-₹ Crl.R.P.No.1500/2008 2 shall be paid to PW1 as compensation u/s.357(3) Cr.P.C. Aggrieved by that, the revision petitioner preferred this revision petition. 2. The complainant's case in the trial Court was that in discharge of a debt, the revision petitioner issued a cheque dated 22.2.2000. When it was presented for encsahment, it was dishonoured for the reason of funds insufficient. The 2[nd] respondent demanded the money by giving a notice in writing to the revision petitioner. Even after that notice, there was no repayment. In the circumstance, the above complaint was filed in the trial Court. 3. To prove the offence, the complainant was examined as PW1 and his documents were marked as Exts.P1 to P5. The incriminating circumstance brought out in evidence were denied by the accused, while questioning Crl.R.P.No.1500/2008 3 him. The trial Court convicted the accused. Against that, he preferred the above appeal. 4. The learned counsel appearing for the revision petitioner contended that Ext.P1 cheque was issued on 22.2.2000 and in the date portion of the cheque, the year '2000' is added by scoring two digits '19', without any attestation, which means there is material alteration in Ext.P1. The 2[nd] respondent claimed that he was an income tax assessee, but he had not paid any income tax to the Government of India, thereby he failed to prove the source of income. When the source of income is not proved, there is no presumption about consideration u/s.118 of the N.I. Act. There was no argument from the side of the respondents. 5. A close reading of Section 138 of the N.I. Act shows that, where any cheque drawn by a person on an Crl.R.P.No.1500/2008 4 account maintained by him with a bank 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 liability, is returned by the bank, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with a bank, such person shall be deemed to have committed an offence under Section 138 of the Negotiable Instruments Act. This deemed provision is subject to the statutory condition that the cheque has to be presented within the statutory period in which it is drawn or within the period of its validity. Secondly, the payee or holder in due course of the cheque makes a demand for payment of such amount by giving a notice in writing to the drawer of the cheque and non-payment of Crl.R.P.No.1500/2008 5 due amount after receipt of notice by the drawer of the cheque. 6. To prove the averment in the complaint, PW1 produced Ext.P1 cheque dated 22.2.2000. It was dishonoured on 29.2.2000 on the ground of funds insufficient. Ext.P2 is the dishonour memo. The 2[nd] respondent demanded money by giving a lawyer notice. Ext.P3 is the copy of the lawyer notice. Ext.P3(a) is the postal receipt. Ext.P4 is the acknowledgment card. Ext.P5 is the extract of the ledger. A close perusal of Exts.P1 to P5 shows that the cheque was dishonoured for the reasons of funds insufficient. PW1 deposed that Ext.P1 was issued in discharge of a debt. Even though, the revision petitioner contended that there is material alteration in Ext.P1 as per Section u/s.87 of the N.I. Act, it is pertinent to note that Ext.P1 was dishonoured for the reason of Crl.R.P.No.1500/2008 6 funds insufficient. If the bank dishonoured the cheque on the ground of material alteration, that itself is a good ground for presuming that the cheque was dishonoured for the reason of material alteration. In the absence of any evidence with regard to material alteration, the contention put forward by the revision petitioner is only to be discarded. On the other hand, the cheque was dishonoured for the reason of funds insufficient. 7. When the cheque is dishonoured for the reason of funds insufficient, presumption is in favour of the holder of the cheque. Reading of Section 139 of the N.I. Act shows as follows: “139. Presumption in favour of the 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 Section 138 for the discharge, in whole or in part, of any debt or other liability”. ## A three Judge bench of the Apex Court in **Rangappa** V. **Sri** Crl.R.P.No.1500/2008 7 ## **Mohan** (2010(11) SCC 441) held as follows:- “The presumption mandated by Section 139 includes a presumption and there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or lliability can be contested. However, there can be no doubt that there is an initial presumption which favours the respondent . complainant” Relied Court decisions in **Hiten P. Dalal** v. Apex **Bratindranath Banerjee** (AIR 2001 SC 3879], **Beena** v. **Muniappan** (AIR 2001 SC 2995) and **Narayana Menon** v. **State** **of Kerala** [2006 (3) KLT 404 (SC)]. Therefore, accepting the law settled by the Apex Court, the initial burden is upon the revision petitioner to rebut that presumption. No rebuttal evidence has been adduced by the revision petitioner in the trial Court. He took a contention that the revision petitioner is an income tax assessee and he failed to prove the source of income. It is admitted fact that the source of income is not a criteria while analysing Crl.R.P.No.1500/2008 8 Section 118, 138 and 139 of the N.I. Act. The evidence of PW1 shows that Ext.P1 was issued in discharge of a debt or liability. When this initial burden is discharged, it is the responsibility of the revision petitioner to rebut the presumption available u/s.139 of the N.I. Act. When there is no rebuttal evidence, it is presumed that Ext.P1 was issued in discharge of debt or liability. The Courts below considered this legal point and convicted the revision petitioner. I do not find any reason to interfere in the conviction passed by the trial Court, but I modify the sentence as follows: 8. The revision petitioner is sentenced to imprisonment till rising of the Court and to pay compensation of 2,50,000/- u/s.357 (3) Cr.P.C., in default₹ of payment of compensation, simple imprisonment for three months. If the compensation amount is deposited, it Crl.R.P.No.1500/2008 9 shall be disbursed to the 2[nd] respondent. The revision petitioner is directed to surrender in the Chief Judicial Magistrate, Kozhikode within 30 days from today for receiving sentence, failing which, Chief Judicial Magistrate, Kozhikode shall issue Non Bailable Warrant against the revision petitioner. Crl. Revision Petition is disposed accordingly. **P.D. RAJAN, JUDGE.** acd Crl.R.P.No.1500/2008 10