Fazil Trading Company & K.K. Shihab v. P.P. Rasheed & State of Kerala

## `IN THE HIGH COURT OF KERALA AT ERNAKULAM` ## `PRESENT` ## `THE HONOURABLE MR.JUSTICE C.S.DIAS` ``` TUESDAY, THE 26[TH] DAY OF SEPTEMBER 2023 / 4TH ASWINA, 1945 ``` ## `CRL.REV.PET NO. 2902 OF 2011` ``` AGAINST THE JUDGMENT DATED 30.01.2009 PASSED BY THE HONOURABLE ADDITIONAL SESSIONS JUDGE (ADHOC-I), KOTTAYAM IN CRIMINAL APPEAL NO.287/2008, MODIFYING THE SENTENCE PASSED BY THE HONOURABLE JUDICIAL FIRST CLASS ``` ``` MAGISTRATE COURT-I, KANJIRAPPILLY IN ST 15/2005 DATED 25.04.2008 ``` ## `REVISION PETITIONERS/APPELLANTS:` ``` 1FAZIL TRADING COMPANY, KANJIRAPPALLY REPRESENTED BY ITS MANAGING PARTNER, K.K.SHIHAB S/O. KASIM, KALLOLIL HOUSE HMT JUNCTION, NORTH KALAMASSERY 2K.K.SHIHAB S/O. KASIM MANAGING PARTNER, FAZIL TRADING COMPANY, KALLOLIL HOUSE HMT JUNCTION, NORTH KALAMASSERY BY ADVS. SRI.A.BALAGOPALAN SRI.M.S.IMTHIYAZ AHAMMED SRI.A.RAJAGOPALAN ``` ## `RESPONDENTS/RESPONDENTS:` ``` 1P.P.RASHEED S/O.PEERMUHAMMED KHAN, KAROTTU MADATHIL HOUSE, KOOVAPPALLY P.O., NEAR MALABAR KAVALA, KOOVAPPALLY PIN 683 743 2STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY ADVS. SMT SEETHA S., SR. PUBLIC PROSECUTOR LIJI.J.VADAKEDOM ``` ``` THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 26.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 2 ``` C. S. DIAS, J. `-------------------------` Crl. Rev. Pet. No.2902 of 2011 `-------------------------` Dated this the 26[th] day of September, 2023 ## ORDER The revision petition is filed questioning the legality and propriety of the judgments in Crl.A. No.287/2008 and S.T. No.15/2005 passed by the Court of Session, Kottayam Division (Appellate Court) and the Court of Judicial First Class Magistrate-I, Kanjirappally (Trial Court), respectively, convicting and sentencing the revision petitioners for the offence under Section 138 of the Negotiable Instruments Act, 1881 (in short, ‘N.I. Act’). The parties are, for the sake of convenience, referred to as per the status before the Trial Court. ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 3 ``` ## Facts in brief 2. The complainant had filed the above complaint before the Trial Court alleging that the accused Nos.2 and 3 had borrowed an amount of Rs.2,31,000/- from the complainant for the business purpose of the first accused. In discharge of the said liability, the accused Nos. 2 and 3 had issued Exts.P1 and P2 cheques for an amount of Rs.1,00,000/- and Rs.1,31,000/-, respectively. The second accused signed the cheques for and on behalf of the first accused firm, with the consent and in the presence of the third accused, at the complainant’s house. The cheques on presentation to the bank were dishonoured, as per Exts.P3 and P4 memorandums, due to insufficiency of funds in the bank account of the first accused firm. Although the complainant had issued Exts.P6 to ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 4 ``` P11 statutory lawyer notices to the accused and they received the same, they failed to pay the demanded amount. The accused Nos.2 and 3 are responsible and in charge of the day-to-day affairs of the first accused firm. Thus, the accused have committed offence punishable under Sections 138 and 141 of the N.I. Act. 3. The accused pleaded not guilty to the substance of accusation read over to them. In trial, PWs 1 and 2 were examined on behalf of and Exts.P1 to P23 were the complainant marked in evidence. The accused denied the incriminating circumstances put to them in the questioning under Section 313 of the Cr.P.C. The accused did not let in defence evidence. ## Trial Court Judgment 4. The Trial Court, after analysing the materials on record, found the accused guilty ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 5 ``` for the offence under Section 138 of the N.I. Act and sentenced the first accused to pay a fine of Rs.1,00,000/- and the accused Nos.2 and 3 to undergo simple imprisonment for a period of five months each and to a fine of pay Rs.65,500/- each, and in default to undergo simple imprisonment for a further period of two months each. And, if the fine amount was realised, the same to be paid as compensation to the first respondent under Section 357(1) of the Cr.P.C. 5. Aggrieved by the said judgment, the accused had preferred Crl.A. No.287/2008 before the Appellate Court. 6. The Appellate Court, after reappreciating the materials on record, partly allowed the appeal by holding that the third accused was not in charge of the affairs and ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 6 ``` management of the first accused firm and, thereby, acquitted her. However, the Appellate Court confirmed the conviction as against the accused Nos.1 and 2 and directed the first accused to pay a fine of Rs.1,00,000/- and the second accused to undergo imprisonment till the rising of the Court and to pay a fine of Rs.1,31,000/- and in default to undergo simple imprisonment for a further period of two months. And, if the fine amount was realised, the same to be paid as compensation to the first respondent. 7. It is questioning the conviction and sentence passed by the courts below as against accused No.1 and 2, the present revision petition is filed. 8. Heard; Sri.M.S.Imthiyaz Ahammed, the learned counsel appearing for the revision ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 7 ``` petitioners; Sri.Liji J.Vadakkedom, the learned counsel appearing for the first respondent and Smt.Seetha S., the learned Public Prosecutor for the second respondent-State. 9. The learned counsel appearing for the revision petitioners argued that there is nothing on record to substantiate that the revision petitioners had borrowed money from the first respondent. Likewise, the first respondent has failed to prove the source from which he could a pay such huge amount. Unfortunately, the courts below have miserably failed to appreciate the evidence in its proper perspective and has unilaterally concluded that the accused have committed the offence. Similarly, there was no material to prove that the second revision petitioner was in charge of the affairs of the first revision petitioner firm. ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 8 ``` Hence, the concurrent judgment of the courts below may be set aside. 10. The learned counsel for the first respondent defended the impugned judgments and agreed that the revision petitioners have miserably failed to discharge the reverse onus of proof cast on them under Section 139 of the N.I. Act. Hence, the revision petition may be dismissed. 11. Is there any illegality, impropriety or irregularity in the judgments of the courts below. 12. Before I delve into the legality and correctness of the impugned judgments, this Court is oblivious of the scope and purport of the revisional jurisdiction under Sections 397 to 401 of the Cr.P.C. 13. It is trite, that the revisional power of ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 9 ``` this Court is to be sparingly exercised and in exceptional rarity. The power is more in the nature of a supervisory jurisdiction, to correct the miscarriage of justice, if any found. The revisional cannot be with power equated Appellate/Second Appellate power. Even if a different view is possible, the revisional Court shall not substitute the view taken by the Trial/Appellate Court, unless there is patent illegality, which is shocking to the conscience of the Court. 14. In Ramrao Chavan vs Sanjaysinh Dattatray Gulabrao Phalke & Anr [(2015) 3 SCC 123] , the Hon’ble Supreme Court has succinctly laid down the scope and powers under Sections 397 to 401 of the Cr.P.C. It is apposite to extract the revisional declaration of law, which reads as follows: ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 10 ``` “14. In the case before us, the learned Magistrate went through the entire records of the case, not limiting to the report filed by the police and has passed a reasoned order holding that it is not a fit case to take cognizance for the purpose of issuing process to the appellant. Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is nonconsideration 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 in the court to do justice in accordance with the principles of criminal jurisprudence. The revisional power of the court under Sections 397 to 401 CrPC 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 decision in exercise of their revisional jurisdiction.” ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 11 ``` 15. Coming back to the facts of the instant case. 16. The cardinal contention of the revision petitioners is that there is nothing on record to prove that they had borrowed an amount of Rs.2,31,000/- and the first respondent has not proved that he had the means to pay the said amount. 17. A negotiable instrument, which includes a cheque, carries the presumption of consideration under Sections 118(a) and 139 of the N.I Act. It is profitable to extract the said relevant provisions: ## “118. Presumptions as to negotiable — instruments Until the contrary is proved, the following presumptions shall be made;- (a) of consideration — that every negotiable instrument was made or drawn for consideration, and that every such instrument, ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 12 ``` when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; 139. 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 section 138, for the discharge, in whole or in part, of any debt or other liability.” 18. A three-Judge Bench of the Hon’ble Supreme Court in Rangappa vs. Sri.Mohan [2010 KHC 4325] , while dealing with Section 139 of the N.I Act has conceptualised the doctrine of ‘reverse onus’, by holding thus: “18. In light of these extracts, we are in agreement with the respondent - claimant that the presumption mandated by S.139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 13 ``` 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 liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. S.139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While S.138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under S.139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by S.138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused / defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 14 ``` settled position that when an accused has to rebut the presumption under S.139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his / her own. 15. Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the 'stop payment' instructions to his bank. Furthermore, the instructions to 'stop payment' had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under S.138 of the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 15 ``` probable defence, the appellant - accused was not able to contest the existence of a legally enforceable debt or liability. The fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction - related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction - expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant. 19. Recently, a three-Judge Bench of the Hon’ble Supreme Court in Kalamani Tex and Anr vs. P. Balasubramanian [2021 (2) KHC 517] ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 16 ``` has reiterated the legal position and doctrine of the reverse onus. It is apposite to extract the relevant paragraphs, which declare the law on the point in the following terms: “14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature (s) of an accused on the cheque/negotiable instrument are established, then these ‘reverse onus’ clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystalized by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat (2019 (2) KHC 243).” 20. Irrefutably, the accused have not sent reply notices to Ext.P6 to P11 statutory lawyer notices sent by the complainant. The accused have also not mounted the box and let in any ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 17 ``` defence evidence. On the contrary, in addition to Exts.P1 and P2 cheques, the first respondent has produced Ext.P18 statement of accounts to substantiate that the accused have borrowed an amount of Rs.2,31,000/- for the business purpose of the first accused firm. Similarly, the oral testimonies of PWs 1 and 2 corroborate with Exts.P1 to P23 documents which prove that Exts.P1 and P2 were issued towards a legally enforceable debt. 21. In case Rangappa’s (supra), it is held that the reverse onus of proof is cast upon the accused to discredit the statutory presumption under Section 139 of the N.I. Act. Unless a probable defence is set up, the statutory presumption cannot be rebutted. Even if there is a slight discrepancy in the complainant’s version, the same cannot help the accused. ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 18 ``` 22. In Kalamani Tex’s case (supra), it is held that even if a blank cheque is voluntarily signed and handed over by the accused, towards some payment, the same would attract the presumption under Section 139 of the N.I. Act. 23. In the case on hand, there is nothing on record to discredit the complainant’s version and the accused have miserably failed to rebut the reverse onus of proof cast on them under Section 139 of the N.I. Act. The courts below have concurrently concluded that the revision petitioners/accused Nos.1 & 2 have committed the offence under Section 138 of the N.I. Act and had sentenced them. 24. I do not find any error, illegality or irregularity in the concurrent findings of the courts below warranting this Court to take a ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 19 ``` contrary view. Thus, I confirm the findings of conviction passed by the courts below and the sentence passed by the Appellate Court. 25. At the said point of time, the learned counsel appearing for the revision petitioners prayed that the revision petitioners may be granted at least two months’ time to pay the compensation amount. 26. Taking into account the fact that the revision petition is of the year 2011 and this Court had suspended the execution of the sentence on 14.11.2011, by directing the revision petitioners to deposit an amount of Rs.30,000/- within a period of three weeks, I find the above submission to be reasonable and justifiable. 27. In the result, - (i) The revision petition is dismissed. ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 20 ``` (ii) The conviction imposed by the courts below and the sentence imposed by the Appellate Court are confirmed. (iii) The revision petitioners/accused Nos.1 & 2 are directed to appear before the Trial Court on or before 27.11.2023 to undergo the sentence and pay the fine amount. (iv) Needless to mention, if the revision petitioners have already deposited any amount as directed by this Court, only the balance amount need be deposited towards fine amount. (v) In case of failure of the revision petitioners to appear before the Trial Court as ordered above, the Trial Court is directed to execute the sentence and recover the fine amount, in accordance with law. (vi) The execution of the sentence shall stand deferred till 27.11.2023. ``` Crl.Rev.Pet. No.2902 of 2011 ``` ``` 21 ``` (vii) The Registry is directed to forthwith forward a copy of this order to the trial court for compliance. Sd/- C. S. DIAS JUDGE SKP/26-09