G.D. Singla v. Alice Mathew and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **FRIDAY, THE 17TH DAY OF NOVEMBER 2017/26TH KARTHIKA, 1939** **Crl.Rev.Pet.No. 989 of 2012 () -------------------------------** **AGAINST THE ORDER/JUDGMENT IN CRA 59/2011 of ADDL.SESSIONS COURT (ADHOC-II), ERNAKULAM DATED 27-10-2011** **AGAINST THE ORDER/JUDGMENT IN CC 1118/2000 of CHIEF JUDL.MAGISTRATE'S COURT, ERNAKULAM DATED 27-12-2010** ## **REVISION PETITIONER(S)/APPELLANT/ACCUSED:** **----------------------------------------** **G.D.SINGLA 147, TOWER NO.10, SUPREME ENCLAVE, MAYUR VIHAR PHASE-1, DELHI-110091.** **BY ADVS.SRI.P.SANJAY SMT.A.PARVATHI MENON SRI.GLEN ANTONY SMT.M.VANAJA** ## **RESPONDENT(S)/RESPONDENTS/COMPLAINANT & STATE:** **--------------------------------------------** **1. MRS. ALICE MATHEW, AGED 45 YEARS, 30/120, POONITHURA, P.O.PETTA, COCHIN-682 317.** **2. STATE OF KERALA** **REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, PIN - 682 031.** **R1 BY ADV. SRI.GEO PAUL R1 BY ADV. SRI.SANU MATHEW R1 BY ADV. SRI.C.R.PRAMOD R1 BY ADV. SRI.S.ASHOK KUMAR. R1 BY ADV. SRI.NOEL JOSEPH R1 BY ADV. SRI.K.V.REJANISH R2 BY SRI.JESTIN MATHEW, PUBLIC PROSECUTOR** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 17-11-2017, ALONG WITH CRL.RP. 990/2012 AND CRL.RP. 995/2012, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** jg-21/12 ## **ALEXANDER THOMAS, J.** **.................................................................... Crl.RP Nos.989, 990 and 995 of 2012 .................................................................... Dated this the 17[th] day of November, 2017.** ## **O R D E R** These three revision petitions arise out of joint trial in respect of three complaints in CC Nos.1118, 1116 and 1117 of 2000 on the file of the Court of Chief Judicial Magistrate, Ernakulam. The parties in those complaints are the same. All the three complaints arose out of dishonour of three cheques, each dated 25.10.1998 for Rs.1,00,000/-, Rs.1,50,000/- and Rs.2,00,000/-, thus totaling to an amount of Rs.4,50,000/-. After the joint trial in respect of these three complaints, the trial court as per the impugned common judgment dated 27.12.2010 has convicted the petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act and has imposed a joint sentence of simple imprisonment for a period of five months and to pay a fine amount of Rs.8,00,000/- and in default thereof to undergo simple imprisonment for a period of three months, and out of the said fine amount of Rs.8,00,000/-, an amount of Rs.7,00,000/- was directed to be disbursed as compensation to the complainant in terms of Section 357(1)(b) of the Code of Criminal Procedure. Aggrieved thereby, the petitioner has filed Criminal Appeal Nos.59, 47 and 48 of 2011 before the Appellate Sessions Court concerned. The Appellate Court concerned Crl.RP Nos.989,990 &995/12 -2- (Court of Addl. Sessions Judge (Ad hoc-II), Ernakulam) as per the impugned common judgment dated 27.10.2011 has affirmed the conviction and modified the sentence, by reducing the substantive sentence of five months' simple imprisonment to imprisonment till the rising of the court and directing that the petitioner shall pay a total compensation amount of Rs.7,50,000/- to the complainant in terms of Section 357(3) of the Cr.PC and in default thereof to undergo simple imprisonment for a period of five months etc. It is challenging these judgments of the courts below that the petitioner (accused) has preferred the instant Criminal Revision Petitions, Crl.RP Nos.989, 990 and 995 of 2012, by taking recourse to the remedies conferred on this Court under Sections 397 and 401 of the Cr.PC. 2. Heard Sri.P.Sanjay, learned counsel appearing for the revision petitioner (accused) and Sri.Geo Paul, learned counsel appearing for R-1 (complainant) and Sri.Jestin Mathew, learned Prosecutor appearing for R- 2 (State). 3. The brief of the case of the complainant is to the effect that the complainant's husband’s landed property in Delhi was purchased by the accused for a total agreed sale consideration of Rs.39,00,000/- and that in spite of the completion of the sale transaction, the accused had not paid the Crl.RP Nos.989,990 &995/12 -3- full sale consideration in that regard and the balance outstanding amounts due from the accused to the complainant's husband in that transaction come to Rs.4,50,000/- at the time of issuance of the cheques in question, and further that the complainant was having the power of attorney of her husband to deal with the above said property and that she was authorised by her husband to receive the balance amounts due to her husband from the accused and that the accused had thus issued the above said three cheques for a total amount of Rs.4,50,000/- drawn from his account and payable in favour of the complainant, which resulted in dishonour etc. Thereafter, the complainant had sent statutory demand notices by registered post in terms of Section 138 proviso (b) of the Negotiable Instruments Act addressed to the accused, which were returned unserved, and thereafter, the complainant after satisfying the requisite formalities has instituted the above said complaints which had led to the conduct of the trial. During the trial, the trial court had examined PW1 (complainant) and PW2 (Bank Manager) and had marked Exts.P1 to P16 documents. The defence had adduced oral evidence of DW1 (a person, who is said to be known to both parties and is said to have the witness in the transaction etc.) and has marked Exts.D1 to D6 documents. According to Crl.RP Nos.989,990 &995/12 -4- the revision petitioner (accused), he was never served with Exts.P4, P9 and P14 statutory demand notices said to have been issued by the complainant etc. Those demand notices sent by registered post have been returned unserved. The accused has not let in any credible evidence to show that the address shown in those notices are not pertaining to him. It is not also seriously disputed that the address of the accused shown in those notices is not the permanent address of the accused. Therefore, both the courts below have rightly held that those notices should be treated to have been duly served on the accused by virtue of the presumptions contained in Section 114(a) of the Indian Evidence Act and Section 27 of the General Clauses Act. 4. The basic defence set up by the petitioner (accused) is to the effect that the property transaction was between the accused and the complainant's husband in respect of a property of complainant’s husband in Delhi, and that the entire amounts in that transaction covered by Ext.D2 agreement for sale have been duly paid by the accused to the complainant's husband, and that the complainant and her husband had to leave Delhi as lot of police complaints and various adverse proceedings were pending against them, as they were defaulters in various loans, etc., and that the complainant and Crl.RP Nos.989,990 &995/12 -5- her husband were running an export business mainly of handicrafts and other items, and as they have to emergently leave Delhi, the complainant's husband had entrusted the unsold handicraft items to the accused and an arrangement was made with the accused that he is authorised to sell those handicraft items and to pass on the sale consideration to the complainant's husband and that for the transaction of handing over of those unsold handicraft items, the petitioner (accused) had issued the instant three cheques towards security for a total amount of Rs.4,50,000/-, as the value of those handicraft items was virtually assessed to that amount. Later, before the accused could sell off all those items, the complainant's husband had urgently approached the accused saying that the complainant’s husband would require emergently an amount of Rs.4,00,000/- for meeting their living expenses and educational needs of their children in Bangalore as they were then settled there and that then an arrangement was made between the complainant's husband and the accused by giving a rebate for the value of the unsold handicraft items, and that the accused had paid an amount of Rs.4,02,000/- to the complainant's husband by Demand Draft dated 29.7.1998 as full and final settlement of the value of the unsold handicraft items, in lieu of the three postdated cheques (the Crl.RP Nos.989,990 &995/12 -6- instant three cheques) dated 25.10.1998 for a total amount of Rs.4,50,000/-. At that point of time, the complainant's husband informed the accused that the instant three cheques, which were given as security, were with the complainant, who was then in Bangalore, and that those will be returned in due course, and that for the transaction of Rs.4,02,000/-, the complainant's husband had duly issued Ext.D1 receipt dated 29.7.1998 and that the said revenue stamp receipt dated 29.7.1998 was duly signed by the complainant's husband and was witnessed by two persons, including DW1 (Pavan Kumar). Ext.D1 revenue stamp receipt dated 29.7.1998 reads as follows:- _“Received DD No.040138 Dt.29.7.98 for Rs.402000/- and a Ch.No.884461 Dt.29.7.98 Favoring my wife Alice Mathew in lieu of 3 post dated ch.No.884463, 884465, 66 all dt. 25.10.98 for Rs.4,50,000/- in total on behalf of my wife Alice Mathew. I hereby undertake to return above mentioned three cheques Dt.25.10.98 which have been fully paid for by Sh.G.D.Singla. As Security I have issued one cheque No.894506 Dt. 25.10.98 which he will not misuse.”_ 5. Ext.D1 was marked during the cross examination of PW1 and that she has deposed that the signature of one Sri.V.V.Mathew appearing therein is that of her husband, but that she has not fully aware as to whether that receipt is issued by her husband. Further she has stated that it is not correct to say that after receiving the full amount, the cheques were Crl.RP Nos.989,990 &995/12 -7- not returned by her husband. The three cheques mentioned in Ext.D1 as cheque Nos.884463, 884465 and 884466, all dated 25.10.1998, for Rs.4,50,000/- in favour of the complainant are the cheques mentioned in the aforesaid three complaints. DD No.040138 dated 29.7.98 and another cheque No.884461 dated 29.7.98 favoring the complainant was given to the complainant’s husband. Further it is also stated that the liability in respect of the amount of Rs.4,50,000/- covered by the above three cheques dated 25.10.1998 has been fully paid by the petitioner (accused) by the transaction covered by Ext.D1 and further that as security (presumably for not returning the above said three cheques of the accused), the complainant's husband has issued cheque No.894506 dated 25.10.1998 with the instruction that the petitioner shall not misuse that cheque etc. DW1 is Pavan Kumar, who is stated to be witness No.2 of Ext.D1 receipt. DW1 has further stated that he knew the accused as well as the complainant and her husband and that he was witness not only to the transaction covered by Ext.D1 receipt but he was also a witness to the agreement for sale of the immovable property covered by Ext.D2. DW1 has deposed that the entire sale consideration covered by Ext.D2 property sale agreement has been paid by the accused to the complainant’s husband. Exts.D3, D4 Crl.RP Nos.989,990 &995/12 -8- and D5 are the receipts for the sale consideration paid for Ext.D2 property sale transaction. Ext.D6 is the indemnity bond executed by the complainant’s husband in favour of the accused, wherein it is stated by the complainant’s husband that in case of any defect in the title of the property conveyed, he will indemnify the accused in that regard. Ext.D6 indemnity bond also has been witnessed by DW1 (Pavan Kumar). Exts.D3, D4 and D5 are the receipts for a total amount of Rs.4,0,4,000/-, which is the sale consideration for the above said property sale transaction. The total agreed sale consideration mentioned in Ext.D2 sale agreement is also Rs.4,04,000/-. DW1 has given evidence regarding the transactions covered not only by Ext.D1 receipt in respect of the transactions said to be relating to the handicraft items but also about Exts.D2 to D6 which relate to the above said property sale transaction. True that the total sale consideration shown in Exts.D2 to D5 is only Rs.4,04,000/-. It may be that the parties would have mutually agreed to show a deflated value in order to evade stamp duty for the sale transaction. Though the complainant has stated that the total sale consideration is Rs.39,00,000/- in the complaints, no material whatsoever has been produced by the complainant to show any of the factual aspects relating to the above said property sale transaction. Crl.RP Nos.989,990 &995/12 -9- PW1 has clearly admitted that she has not executed any documents in pursuance of the power of attorney granted by her husband in her favour for the aforesaid property transaction. But, at any rate, there has been no serious disputation with respect to Ext.D1 receipt regarding the main defence set up by the accused about the handing over of the security cheques and the other aspects covered by Ext.D1 receipt. 6. It is also relevant to note that PW1 has clearly deposed in cross examination (see pages 4 and 5 thereof) as follows: _“My husband had an export business. Handicrafts, readymade garments and a number of other items were used to be exported by my husband. After the failure of the export business, we shifted to Bangalore. In export business, we had heavy financial loss. At that time, we had Bank loans, chitty loan and that other loan.”_ The above said evidence tendered by none other than PW1 in cross examination would clearly probabilise the case of the accused that the complainant’s husband was running an export business relating to handicrafts and other items and that due to failure of the export business, they were compelled to shift their residence to Bangalore and further that due to heavy loss faced in the business, they had very many pending Bank loans, chitty loans and other loans etc. Therefore, this would in a substantial measure probabilise the very case set up by the accused Crl.RP Nos.989,990 &995/12 -10- regarding the aspects dealt with in Ext.D1. 7. In these circumstances, the only conclusion that could have been reached by any court of law was that the accused has at least by the standard of preponderance of probability set up a strong case that the instant three cheques were in relation to the above said transaction covered by Ext.D1 and that the petitioner (accused) had already cleared the liability in that regard, with the complainant’s husband. Both the courts below have repelled the said defence plea of the accused based of Ext.D1 receipt on the sole ground that Ext.D1 receipt has been issued three months before the dates of the three cheques in question bearing date 25.10.1998. 8. It is true that the petitioner (accused) has very candidly and frankly admitted, which is discernible even from Ext.D1 receipt, that he had given the three cheques for a total amount of Rs.4,50,000/-, all dated 25.10.1998. Therefore, there is no doubt that the R-1 (complainant) is right in contending that she is entitled to draw the benefit of statutory presumption under Section 139 of the NI Act. But, the said presumption is certainly a rebuttable one. It does not require citation of any judicial authority to say that the onus on the part of the accused to rebut the statutory presumption is only on the inferior standard of proof based on Crl.RP Nos.989,990 &995/12 -11- preponderance of probability and not based on the superior standard of proof beyond reasonable doubt. The above said circumstances relating to the issuance of Ext.D1 and also to a substantial degree about the aspects based on Exts.D2 to D6, would clearly show that the accused has been successful enough to rebut the statutory presumption drawn on the basis of Sections 118 (a) and 139 of the NI Act, in the light of the above said evidentiary aspects on record. Even _dehors_ Exts.D2 to D6 documents, the accused has been successful to rebut the statutory presumption solely based on Ext.D1 receipt. PW1 (complainant) has at least admitted that the signature of one Sri.V.V.Mathew appearing in Ext.D1 revenue stamp receipt is that of her husband. PW1 has also admitted during cross examination that her husband, Sri.V.V.Mathew, was available in the trial court at the time of her deposition and that she is not aware whether her husband would depose in evidence. Therefore, in view of these aspects, it is only fair and just to conclude on a reasonable basis that the accused has been able to rebut the statutory presumption. Since that is the position, the statutory presumption will disappear and thereupon, the burden was heavy upon the complainant to prove her case beyond reasonable doubt. If the very case set up by the accused based on Ext.D1 as well as based on Exts.D2 to D6 Crl.RP Nos.989,990 &995/12 -12- was _per se_ false, all that was required by the complainant was to ensure that her husband Sri.V.V.Mathew enters the witness box and gives evidence to convince the trial court about the discrepancies, contradictions and falsities, if any, in Exts.D1 to D6. The complainant has not even moved her little finger to ensure that at least some evidence is given to rebut the evidence borne out by Exts.D1 to D6 documents. Since no such effort has been done, it is only to be held that the complainant has failed to prove her case against the accused. In view of these aspects, the petitioner (accused) is entitled for the benefit of acquittal. 9. It is contended by the learned counsel for the R-1 (complainant) that the petitioner has no case that he has taken any steps for issuing stop payment memo to the Bank concerned, if he had a case that the liability was discharged on the basis of Ext.D1 etc. The non-issuance of stop payment memo cannot be the sole basis for holding that there is no rebuttal of statutory presumption in this case, as the petitioner has adduced the above said strong evidentiary aspects to rebut the statutory presumption. So the above contention of the complainant is only to be repelled. 10. Further it is relevant to note that the complaints and the proof affidavit are conspicuously silent about the dates of dishonor of the three cheques, the dates on which information was received by the complainant Crl.RP Nos.989,990 &995/12 -13- regarding the dishonor of the cheques by the Bank, the dates on which the statutory demand notices under Section 138 proviso (b) of the NI Act have been sent to the complainant, etc. The three dishonor memos as per Exts.P2, P7 and P12, are bearing the date 9.4.1999. It has been come out in evidence that the three statutory demand notices have been sent by registered post through Exts.P3, P8 and P13 postal envelops and those envelops were returned back to the complainant as unserved. Ext.P16 is the covering letter on the basis of which the complainant is said to have received the three dishonoured cheques from her Bank. Ext.P16 covering letter issued by the complainant’s Bank shows that the date mentioned therein is 12.4.1999. PW1 (complainant) has deposed (see page 6, 9[th] line thereof) as follows: “ _The cheques were returned on 12.4.1999 as ‘returned to drawer’. I received the cheques along with memo directly from the Bank. In Ext.P2, the cheque return date is shown as 9.4.1999. It is not correct to say that the cheques were returned on 9.4.1999.”_ So the specific case of PW1 is that though the cheque return memos are bearing the date 9.4.1999, she had actually received the same directly from her Bank on 12.4.1999. As per the provisions contained in proviso (b) to Section 138 of the NI Act as it stood at the relevant time (April, 1999), was that the payee or the holder in due course of the cheque as the case may be, should make a demand for payment of the said amount of money by giving a notice in Crl.RP Nos.989,990 &995/12 -14- writing to the drawer of the cheque within 15 days of receipt of information from the Bank regarding the return of the cheque as unpaid. The above said time limit of 15 days mentioned in proviso (b) was later amended and altered as 30 days as per the Central Amendment Act 55/2002 made effective on prospective basis from 6.2.2003. Therefore, at the relevant time in 1999, it was incumbent upon the complainant to have sent a statutory demand notice in terms of Section 138 proviso (b) of the NI Act within a period of 15 days from the date of receipt of the information from the Bank regarding the return of the cheque as unpaid. It is the specific case of PW1 that she had received the said information from her Bank regarding the return of the cheques on 12.4.1999. Though the three notices as per Exts.P4, P9 and P14 are bearing the date 27.4.1999, it is evident from the unopened/unserved postal envelops returned to them as per Exts.P3, P8 and P13 that they were actually despatched by the complainant from the post office by registered post only on 29.4.1999. As per the mandate of the then existing proviso (b) to Section 138 of the NI Act, the period of 15 days from the date of receipt of information on 12.4.1999 would expire on 27.4.1999. It is clearly come out in evidence that the notices were actually sent through registered post only on 29.4.1999, which is beyond the said Crl.RP Nos.989,990 &995/12 -15- statutory outer time limit of 15 days prescribed in proviso (b) to Section 138 of the NI Act. 11. It has been clearly held by a catena of rulings of the Apex Court as well as of various High Courts, more particularly in the decision as in **Sivakumar** v. **Natarajan** , reported in (2009) 13 SCC 623, that if statutory demand notices are sent after the expiry of the outer time limit prescribed in proviso (b) to Section 138 of the NI Act, then the complainant cannot be validly and lawfully triggered in action. (See also the decisions in **Goa Antibiotics and Pharmaceuticals Ltd v. R.K.Chawla and another** , reported in 2009(5) Mh.L.J. 386 (Bombay), paras 4, 5 and 6, **MSR Leathers v. S.Palaniappan and Another** , reported in (2013) 10 SCC 568, para 16, **Monoth Investments Ltd. v. Pullukola Properties Ltd. and Another** , reported in (2001) 6 SCC 582, para 5, etc.) 12. It will be profitable to refer to paras 10 to 12 of the aforesaid decision of the Apex Court in **Sivakumar** v. **Natarajan** , reported in (2009) 13 SCC 623, which read as follows: _“10. We may, however, at the outset notice that both clauses (a) and (b) of the proviso appended to Section 138 of the Act employed the term “within a period”. Whereas clause (a) refers to presentation of the cheque to the bank within a period of six months from the date on which it is drawn, clause (b) provides for issuance of notice “to the drawer of the cheque, within thirty days of the receipt of information”. The words “within thirty days of_ Crl.RP Nos.989,990 &995/12 -16- _the receipt of information” are significant. Indisputably, intimation was received by the respondent from the bank on 3-122003._ _11. Parliament advisedly did not use the words “from the date of receipt of information” in Section 138 of the Act. It is also of some significance to notice that in terms of Section 9 of the General Clauses Act, 1897, whereupon reliance has been placed by the High Court, the statute is required to use the word “from” and for the purpose of including the last in a series of days or any other period of time, to use the word “to”. The departure made from the provisions of Section 9 of the General Clauses Act by Parliament, therefore, deserves serious consideration._ _12. Indisputably, the notice was issued on the 31[st] day and not within a period of thirty days from the date of receipt of intimation from the bank. If Section 9 of the General Clauses Act is not applicable, clause (b) of the proviso appended to Section 138 of the Act was required to be complied with by the respondent for the purpose of maintaining a complaint petition against the appellant.”_ 13. Hence, it is only to be held that, on the sole ground that the complainant had not sent the statutory demand notices within the outer time limit of 15 days prescribed in proviso (b) to Section 138 of the NI Act, the petitioner (accused) is entitled for the benefit of acquittal as the complaints themselves are not maintainable. In view of these aspects, it is only to be ordered that both the courts below have committed serious illegality and perversity in the rendering of the impugned judgments. In the light of the aforesaid aspects, it is ordered that the impugned judgments of both the courts below are set aside and the accused is acquitted of the offence punishable under Section 138 of the NI Act and he is set at liberty. Crl.RP Nos.989,990 &995/12 **==> picture [21 x 9] intentionally omitted <==** 14. Registry will return back the lower court records to the trial court. Petitioner shall produce a certified copy of this order before the trial court for necessary information. With these observations and directions, the captioned Criminal Revision Petitions stand finally disposed of. ## **(ALEXANDER THOMAS, JUDGE)** jg