High Court of KeralaSingle Judge2015-10-13Disposed of accordingly.

Haridas v. State of Kerala & M/S Polar International Ltd.

Case / Petition Number:Crl.Rev.Pet.No.3271 of 2008

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. D. Rajan
Judgment Date: 2015-10-13
Court Decision / Holding: Revision petition disposed of in part: Conviction affirmed; sentence modified to imprisonment till rising of the Court under Sec. 138 NI Act and compensation of Rs. 5,87,000 under Sec. 357(3) Cr.P.C.; in default, three months’ simple imprisonment; compensation to be disbursed to Polar if realized; petitioner to surrender to JFMC, Ernakulam to serve modified sentence; NBW if he fails to comply.
Final Disposition: Disposed of accordingly.

Parties to the Case

Appellants / Petitioners

Haridas, aged 52, Prop. Real Star Distributor, Ettumanoor

Respondents

State of Kerala, rep. by Public Prosecutor, High Court of Kerala, Ernakulam
M/S Polar International Ltd., Calcutta Branch Office, Cochin-18

Legal Representation & Advocates

Counsels for Petitioners

• Sri V. Rajendran (Perumbavoor)
• Sri George Varghese Kizhakkambalam

Counsels for Respondents

• Sri. Dhanesh Mathew Manjooran (Public Prosecutor)

Case Synopsis & Summary

Haridas, a businessperson, challenges a concurrent conviction under Section 138 of the Negotiable Instruments Act (NI Act) recorded against him in the Judicial First Class Magistrate’s court and confirmed on appeal by the III Additional Sessions Judge, Ernakulam. The facts: Haridas issued Ext. P1 cheque for Rs. 5,87,000 drawn on ICICI Bank in discharge of a debt to Polar International Ltd. (Calcutta Branch), which bounced for insufficient funds. The complainant, represented by PW1 (power of attorney holder of Polar), supported by Exts. P1–P8, claimed a legally enforceable debt. The defence did not present evidence. The trial court convicted and sentenced Haridas to one year’s imprisonment under Sec. 138 NI Act and ordered payment of Rs. 7,90,000 under Cr.P.C. 357(3). The appellate court affirmed conviction but modified the sentence. The Kerala High Court, while upholding the conviction and applying the presumption under Section 139 NI Act in light of Rangappa v. Mohan (2010), found no rebuttal evidence and modified the sentence further. It now imposes imprisonment till rising of the Court under Sec. 138 NI Act, with compensation of Rs. 5,87,000 and, in default, three months’ simple imprisonment. It directs surrender to the trial court to serve the modified sentence and warns of NBW if non-compliant. The petition is disposed of accordingly, with directions to disburse compensation if realized."

Provisions of Law Cited

Section 138 of the Negotiable Instruments ActSection 139 of the Negotiable Instruments ActSection 357(3) Cr.P.C.Companies Act, 1956

Legal Doctrines & Maxims

Presumption in favour of the holder under Section 139 NI Act (rebuttable)
Burden shifting upon proof of a legally enforceable debt
Rangappa v. Sri Mohan doctrine on presumptions under NI Act

Submissions & Arguments

Contentions of Appellants / Petitioners

The revision petitioner contends there is no evidence to prove the transaction or the existence of a legally enforceable debt; PW1’s testimony is insufficient for conviction; the sentence is excessive and should be modified. The petitioner argues that no defence evidence was led and that the link between the debt and the cheque was not adequately established; the evidence should not sustain the conviction beyond reasonable doubt. The Public Prosecutor does not object to modifying the sentence but asserts that PW1’s evidence is sufficient to prove the offence, and the conviction should be maintained.

Contentions of Respondents

The respondents contend that the evidence (PW1 and Exts. P1–P8) properly proves a debt and a dishonoured cheque under Sec. 138 NI Act; the presumption under Sec. 139 NI Act arises in favor of the holder, shifting burden to the accused; the appellate court’s conviction is sound and the sentence should not be reduced beyond reasonable bounds; the court may consider the statutory framework and the nature of the transaction while accordingly exercising its discretion.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Rangappa v. Sri Mohan	(2010) 11 SCC 441	Positive	Cited to explain that Sec. 139 NI Act creates a rebuttable presumption in favour of the holder; initial presumption exists, which the accused can rebut.

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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** **TUESDAY, THE 13TH DAY OF OCTOBER 2015/21ST ASWINA, 1937** **Crl.Rev.Pet.No. 3271 of 2008 ( )** **--------------------------------AGAINST THE JUDGMENT IN CRL.APPEAL 937/2006 of III ADDL. SESSIONS COURT,ERNAKULAM DATED 24-07-2008** **AGAINST THE JUDGMENT IN CC 306/2002 of JUDICIAL FIRST CLASS MAGISTRATE-II, ERNAKULAM DATED 15-11-2006** ## **REVISION PETITIONER(S)/APPELLANT/ACCUSED:** **----------------------------------------** **HARIDAS, AGED 52,** **PROP.REAL STAR DISTRIBUTOR, ETTUMANOOR RESIDING AT.HARIMANDIR, KIADANGOOR, KOTTAYAM.** **BY ADVS.SRI.V.RAJENDRAN (PERUMBAVOOR) SRI.GEORGE VARGHESE KIZHAKKAMBALAM** ## **RESPONDENT(S)/RESPONDENTS/STATE AND COMPLAINANT:** **-----------------------------------------------** **1. STATE OF KERALA, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **2. M/S.POLAR INTERNATIONAL LTD. CALCUTTA BRANCH OFFICE, ST.BANEDICT ROAD, COCHIN-18.** **R1, BY PUBLIC PROSECUTOR SRI. DHANESH MATHEW MANJOORAN.** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 13-10-2015, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **acd** ## **P.D. RAJAN, J.** ------------------------------------------Crl.R.P.No.3271 of 2008 ---------------------------------------------Dated this the 13[th] day of October, 2015 ## **ORDER** Revision petitioner, who is the appellant in Crl. Appeal No.937/2006 on the file of III Additional Sessions Judge, Ernakulam, challenges the concurrent finding of conviction u/s.138 of the Negotiable Instruments Act (hereinafter referred to as the N.I. Act). He was the accused in C.C.No.306/2002 of Judicial First Class Magistrate-II, Ernakulam, he was convicted and sentenced to simple imprisonment for 1 year u/s.138 of the N.I. Act and to pay compensation of 7,90,000/- u/s.357(3) Cr.P.C., in default,₹ simple imprisonment for one month. 2. The complainant's case in the trial Court is that Crl.R.P. No.3271/2008 2 the accused was having credit business with the complainant and in discharge of that debt, he issued Ext.P1 cheque drawn on ICICI bank for 5,87,000/-. When₹ Ext.P1 was presented for encashment, it was dishonoured for the reason of funds insufficient. The complainant issued a lawyer notice and demanded the due amount. Even after receipt of the lawyer notice, there was no repayment. Hence, the above complaint. 3. To prove the offence, the complainant examined PW1 and produced documentary evidence of Exts.P1 to P8. The incriminating circumstances brought out in evidence were denied by the accused while questioning him. He did not adduce any defence evidence. The trial Court convicted him. Against that, he preferred an appeal, where the conviction was confirmed, but modified the sentence. Being aggrieved by that, the accused preferred Crl.R.P. No.3271/2008 3 this revision. 4. The learned counsel appearing for the revision petitioner contended that the 2[nd] respondent has not produced any evidence to prove the transaction and the evidence of PW1 is not sufficient for a conviction. He also contended that the sentence imposed by the trial Court is excessive. The learned Public Prosecutor has no objection in modifying the sentence. But, he contended that the evidence of PW1 is sufficient to prove the alleged offence. 5. The specific case of PW1, who is the power of attorney holder of the 2[nd] respondent, is that as per Ext.P8 power of attorney, he is authorised to represent the 2[nd] respondent. The 2[nd] respondent is a Company registered under the Companies Act 1956 and its headquaraters at Kolkatta. The revision petitioner had business transaction with the 2[nd] respondent and in partial Crl.R.P. No.3271/2008 4 discharge of a debt, he issued Ext.P1 cheque. When Ext.P1 was presented for encashment, it was dishonoured for the reason of funds insufficient. Ext.P2 is the pay-in-slip of Dhanalakshmi Bank. Exts.P3 and P4 are memos. Ext.P5 is the of the notice. Ext.P6 is the copy postal acknowledgment card. Ext.P7 is the return notice. Ext.P8 is the certified copy of power of attorney. Analysing the evidence of Exts.P1 to P8, it is clear that the cheque was dishonoured for the reason of funds insufficient. When cheque is dishonoured for the reasons stated u/s.138 of the N.I. Act, a presumption u/s.139 of the N.I. Act can be drawn in favour of the holder of the cheque. 6. When complainant proves the existence of a legally enforceable debt, the presumption under Section 139 of the Negotiable Instruments Act starts operating and burden shifts to the accused. Section 139 reads as Crl.R.P. No.3271/2008 5 ## 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”. ## Apex Court in three-Judge Bench judgment in **Rangappa** v. **SriMohan** [(2010) 11 SCC 441] held as follows: “The presumption mandated by Section 139 includes a presumption that 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 liability can be contested. However, there can be no doubt that there is an initial presumption which favour the respondent complainant” No rebuttal evidence has been adduced by the revision petitioner. Therefore, the trial Court convicted the revision petitioner, which was upheld by the appellate Court. I do not find any illegality in the above conviction. 7. It is clear from the judgment of the trial Court Crl.R.P. No.3271/2008 6 that the revision petitioner was sentenced to imprisonment for one year u/s.138 of the N.I. Act and directed to pay compensation of 7,90,000/- u/s.357(3) Cr.P.C. It is true₹ that the sentence is purely discretion of the trial Court, but that discretion has to be applied in a rational manner. Considering the nature of transaction and the amount due, I am of the opinion that the sentence imposed by the trial Court needs interference. Therefore, I modify the sentence as follows: 1) The revision petitioner is sentenced to imprisonment till rising of Court u/s.138 of the N.I. Act and to pay compensation of 5,87,000/- u/s.357(3) Cr.P.C., in default of payment of compensation, simple imprisonment for three months. 2) If the compensation amount is realised, it shall be disbursed to the 2[nd] respondent forthwith. Crl.R.P. No.3271/2008 7 3) The revision petitioner is directed to surrender in the Judicial First Class Magistrate-II, Ernakulam forthwith to undergo the modified sentence, failing which the learned Magistrate shall issue Non Bailable Warrant against him. The Crl.Revision Petition is disposed of accordingly. **P.D. RAJAN, JUDGE.** acd Crl.R.P. No.3271/2008 8