Hamza v. Moidutty and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE N.ANIL KUMAR** **WEDNESDAY, THE 11TH DAY OF NOVEMBER 2020 / 20TH KARTHIKA, 1942** ## **Crl.Rev.Pet.No.599 OF 2013** **CRA 354/2010 OF ADDITIONAL SESSIONS COURT (ADHOC)-III, MANJERI ST 118/2010 OF JUDICIAL FIRST CLASS MAGISTRATE COURT-II, TIRUR** ## **REVISION PETITIONER/S:** **HAMZA, AGED 42 YEARS S/O.KUNHALAVI, PARAPPURATH ILLAH, PARAMBIL HOUSE, TRIKKANDIYOOR AMSOM, KUMARAMANGALAM DESOM, TIRUR TALUK** **BY ADVS. SRI.SUNIL NAIR PALAKKAT SRI.K.N.ABHILASH SMT.R.LEELA** ## **RESPONDENT/S:** **1 MOIDUTTY AGED 58 YEARS S/O.KUNHAYAMU,PALAKAPARAMBIL (H) PONMUNDAN AMSOM DESOM,TIRUR (PO) TIRUR TALUK,MALAPPURAM DISTRICT 676 101** **2 STATE OF KERALA REP BY PUBLIC PROSECUTOR HIGH COURT OF KERALA ERNAKULAM PIN 682 031 R1 BY ADV. SRI.BLAZE K.JOSE R1 BY ADV. SMT.DEEPA NARAYANAN R1 BY ADV. SRI.K.VIPIN** ## **OTHER PRESENT:** ## **SR.PP.M.S.BREEZ** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 09-11-2020, THE COURT ON 11-11-2020 PASSED THE FOLLOWING:** CRRP No.599/2013 **==> picture [31 x 8] intentionally omitted <==** ## **ORDER** Dated this the 11[th] day of November, 2020 This criminal revision petition is directed against the judgment dated 12.11.2012 rendered by the Additional Sessions Court (Adhoc)-III, Manjeri, in Crl.Appeal No.354 of 2010, whereby the learned Additional Sessions Judge dismissed the appeal, confirming the conviction and sentence rendered by the trial court to undergo imprisonment till the rising of the court and to pay a compensation of Rs.2,00,000/- and in default of payment of compensation to undergo simple imprisonment for a period of two months more under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as, “NI Act”). 2. The revision petitioner was the accused in ST No. 118 of 2010 on the file of the Judicial CRRP No.599/2013 **==> picture [31 x 8] intentionally omitted <==** First Class Magistrate Court-II, Tirur and the appellant in Crl.Appeal No.354 of 2010 on the file of the Additional Sessions Court (Adhoc)III, Manjeri. The 1[st] respondent filed a complaint under Section 138 of the NI Act before the trial court alleging commission of the offence punishable under Section 138 of the NI Act against the accused. Upon consideration of the complaint, the learned magistrate is _prima facie_ satisfied that the case is made out against the accused. Hence, the learned magistrate took cognizance of the offence under Section 138 of the NI Act and the case was taken on file as ST No. 118 of 2010. Parties are hereinafter referred to as the 'complainant' and 'accused' according to their status in the court below unless otherwise stated. 3. It is the case of the complainant that the accused borrowed a sum of Rs.2,00,000/- from CRRP No.599/2013 **==> picture [31 x 8] intentionally omitted <==** the complainant and issued a cheque dated 31.08.2007 for Rs.2,00,000/- drawn on the account maintained by the accused with Vijaya Bank, Tirur Branch. The complainant presented the cheque for encashment through the Ponmundam Service Co-operative Bank, Vailathur Branch, but the cheque was returned unpaid with the endorsement “insufficient funds”. Statutory notice was issued on 15.10.2007 to the accused calling upon him to pay the amount. The accused received the notice on 16.10.2007. He sent a reply notice on 19.10.2007 raising contentions. Hence, the complaint. 4. On service of summons, the accused appeared before the trial court. Particulars of the offence were read over and explained to the accused, to which the accused pleaded not guilty. Thereafter, the complainant was examined as PW1 and marked Exts.P1 to P10 on prosecution side. After the witness for the CRRP No.599/2013 ..5.. complainant had been examined, the accused was questioned under Section 313(1)(b) of the Cr.P.C. for the purpose of enabling him to explain any circumstance appearing in the evidence against him. He denied all the circumstances. He stated that he owed an amount of Rs.55,000/- only to the complainant. According to him, before the issuance of statutory notice, the complainant had collected Rs.25,000/- from him. However, no defence evidence was adduced. 5. On appreciation of the evidence, the learned magistrate held that the execution of the cheque was admitted by the accused and that it was proved by the complainant that the cheque was dishonoured for the reason “insufficient funds”. Hence, the learned magistrate concluded that the cheque was issued by the accused for the discharge of debt or liability. 6. Heard Sri.Sunil Nair Palakkat, the learned CRRP No.599/2013 **==> picture [31 x 8] intentionally omitted <==** counsel for the revision petitioner; the learned counsel for the 1[st] respondent; and Sri.M.S.Breez, the learned Senior Public Prosecutor for the State. 7. In order to determine the question whether the offence punishable under Section 138 of the NI Act is made out against the accused, it is necessary to examine the Penal provision of Section 138 of the Act and the presumptions to be raised as envisaged by the provisions of Sections 118 and 139 of the NI Act. Section 118 of the NI Act provides certain presumptions to be raised laying down some special rules of evidence relating to presumptions. The presumption, therefore, is a matter of principle to infuse credibility to negotiable instruments including cheques and to encourage and promote the use of negotiable instruments in financial transactions. Section 118 of the NI Act provides presumptions to be raised until CRRP No.599/2013 **==> picture [31 x 8] intentionally omitted <==** the contrary is proved, (i) as to consideration, (ii) as to date of instrument, (iii) as to time of acceptance, (iv) as to time of transfer, (v) as to order of indorsements, (vi) as to appropriate stamp, and (vii) as to holder being a holder in due course. That apart, Section 139 of the NI Act provides that 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 of the NI Act for the discharge, in whole or in part, of any debt or other liability. Applying the definition of the word 'proved' in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the NI Act, it becomes evident that in a trial under Section 138 of the NI Act, a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability CRRP No.599/2013 **==> picture [31 x 8] intentionally omitted <==** once the execution of negotiable instrument is either proved or admitted. Needless to say that as and when the complainant discharges the burden to prove that the cheque was executed by the accused, the rules of presumptions under Sections 118 and 139 of the NI Act are very much available to the complainant and the burden shifts on the accused. However, this presumption is rebuttable. Under the circumstances, it is the duty of the accused before the court by adducing evidence to show that the cheque was not supported by consideration and that there was no debt or liability to be discharged as alleged. It is necessary on the part of the accused to set up a probable defence for getting the burden of proof shifted to the complainant. Once such rebuttable evidence is adduced and accepted by the court, the burden shifts back to the complainant. CRRP No.599/2013 **==> picture [31 x 8] intentionally omitted <==** 8. In this case, the complainant was examined as PW1. He stated that the accused borrowed an amount of Rs.2,00,000/- from him for business purpose and issued Ext.P1 cheque for the legally enforceable debt. Ext.P9 reply issued by the learned counsel for the accused would show that he had admitted that an amount of Rs.2,00,000/- was due to the complainant from him. The issuance of cheque was also admitted by him. His main contention is that a signed blank cheque was handed over to the complainant and entries were filled up subsequently. Ext.P10 is an agreement executed by the accused in favour of the complainant on 28.09.2007. In Ext.P9 reply notice, the accused admitted execution of Ext.P10. Signatures in Exts. P1 and P2 are not disputed. In cross examination, PW1 admitted that Rs.6,000/- was fixed as monthly profit for the amount of Rs.2,00,000/borrowed by the accused. PW1 further admitted CRRP No.599/2013 **==> picture [37 x 8] intentionally omitted <==** that the said amount of Rs.6,000/- each was also paid for a period of seven months. Hence, it is contended that an amount of Rs.42,000/was discharged towards debt. 9. Relying on the Division Bench decision in **Joseph Sartho** v. **Gopinathan Nair** [2008 (4) KLT 509], the learned counsel for the revision petitioner contended that if a portion of the amount covered by the cheque was repaid, the cheque for the whole amount is unsustainable in a prosecution under Section 138 of the NI Act, presumably, for the reason that the amount covered under the cheque does not reflect the actual dues to the complainant. Going by Ext.P10, it is clear that the amount of Rs.6,000/- agreed to be paid in Ext.P10 is not towards the discharge of the principal amount of Rs.2,00,000/-. The payment of Rs.6,000/- per month was not the actual amount due to the complainant as per Ext.P10, but a separate CRRP No.599/2013 **==> picture [37 x 8] intentionally omitted <==** arrangement to get interest for the principal amount. The learned counsel for the revision petitioner contended that the complainant is not entitled to get unconscionable interest from the accused. In case the complainant is collecting unconscionable interest from the accused, separate action may lie on him in accordance with the laws. 10.The averment based on Ext.10 is not a ground to avoid payment of the amount covered under Ext.P1 cheque. In **Joseph Sartho's** case ( _supra_ ), a portion of the amount was repaid. In this case, there is nothing on record to show that a portion of the amount was repaid. What was paid, as per Ext.P10, would not come under the purview of the portion of the amount covered under Ext.P1. Hence, the principles formulated in **Joseph Sartho's** case ( _supra_ ) are not applicable in this case. 11.It is well settled law that when concurrent CRRP No.599/2013 **==> picture [37 x 8] intentionally omitted <==** findings of facts rendered by the trial court and the appellate court are sought to be set aside in revision, the High Court does not, in the absence of perversity, upset factual findings arrived at by the two courts below. It is not for the revisional court to re-analyse and reinterpret the evidence on record in a case, where the trial court has come to a probable conclusion. Unless the contrary is proved, it is presumed that the holder of a cheque received the cheque of the nature referred to in Section 138 of the Act for the discharge, in whole or in part, of any debt or other liability. In the case at hand, the accused has no case that he has not signed the cheque or parted with under any threat or coercion. That apart, the accused has no case that unfilled cheque had been lost irrecoverably or stolen. The accused failed to prove in the trial by leading cogent evidence CRRP No.599/2013 **==> picture [37 x 8] intentionally omitted <==** that there was no debt or liability. In **Bir Singh v. Mukesh Kumar [(2019) 4 SCC 197],** the Supreme Court held that in view of Section 139 of the Act read with Section 118 of the Act thereof, the Court has to presume that the cheque has been issued for discharging a debt or liability. Paragraphs 39 and 40 of the above case are relevant in this context and the same is extracted below for convenience of reference:- “39. It is not the case of the respondentaccused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent-accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. The second question is also answered in the negative. 40. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.” 12.In view of the above, both the trial court and CRRP No.599/2013 **==> picture [37 x 8] intentionally omitted <==** the appellate court rightly held that the burden was on the accused to disprove the initial presumption under Sections 118 and 139 of the NI Act. The burden is not discharged rightly. Hence, the conviction of the accused for the offence under Section 138 of the NI Act is only to be upheld. 13.Coming to the question of sentence, Ext.P1 cheque was executed as early as on 31.08.2007. The accused has been conducting this criminal case for the last 13 years. Considering the facts and circumstances, it is just and proper to modify the sentence awarded by the two courts below by sustaining the conviction imposed. In the result, the criminal revision petition is partly allowed. The conviction against the accused under Section 138 of the NI Act is confirmed. The sentence is modified as follows; The accused is sentenced to pay a fine of CRRP No.599/2013 **==> picture [37 x 8] intentionally omitted <==** Rs.2,00,000/- (Rupees two lakhs only) and in default of payment of fine to undergo simple imprisonment for a period of three months. In view of the situation prevailing in the country due to Covid-19 pandemic, the accused is given six months time from today to pay the fine amount. In case the fine amount is deposited by the accused before the trial court as ordered, the same shall be disbursed to the complainant as compensation in accordance with rules. Registry is directed to send back the records to the trial court for execution of sentence. ## **Sd/-** ## **N.ANIL KUMAR** ## **JUDGE** Bka/-