Jayakumar K.J. v. George Thomas and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE K.HARIPAL** **FRIDAY, THE 11[TH] DAY OF JUNE 2021 / 21ST JYAISHTA, 1943** ## **CRL.A NO. 627 OF 2013** **AGAINST THE JUDGMENT IN C.C. No. 452/2012 ON THE FILES OF THE COURT OF THE JUDICIAL MAGISTRATE OF FIRST CLASS -II, MUVATTUPZHA, APPELLANT/COMPLAINANT:** **JAYAKUMAR K.J. S/O.JANARDHANAN, RESIDING AT KULANGARA MURIYIL HOUSE, NORTH PIRAMADOM P O, PAMPAKUDA** **BY ADVS. SRI.R.BINDU (SASTHAMANGALAM) SRI.PRASANTH M.P** ## **RESPONDENTS/ACCUSED & STATE:** **1 GEORGE THOMAS S/O.THOMAS,VELUTHEDATHUPARAMBIL HOUSE, RAJAKKAD P O, PIN - 2 STATE OF KERALA REP BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM, KOCHI-682031** ## **R1 BY ADV SRI.SABU FRANCIS** **R2 BY SRI. M.S. BREEZ, SENIOR PUBLIC PROSECUTOR** **THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 09.04.2021, THE COURT ON 11.06.2021 DELIVERED THE FOLLOWING:** Crl.Appeal No. 627 of 2013 2 **==> picture [34 x 11] intentionally omitted <==** ## **JUDGMENT** The appellant is the complainant in a prosecution initiated under Section 142 of the Negotiable Instruments Act, hereinafter referred to as the Act, who suffered defeat from the trial court. His grievance is that in spite of the fact that the first respondent/accused did not even take care to cross examine the appellant, who was examined as PW1, on the basis of a wrong interpretation adopted by the learned Magistrate, he suffered the case. 2. The complaint was instituted on 25.05.2012 following the statutory time table, alleging that the accused/first respondent had borrowed from him an amount of Rs.2,50,000/-, that for discharging the liability, he issued cheque for the amount bearing No. 050666 dated 03.04.2010 drawn on Muvattupuzha branch of the Bank of India. When the cheque was presented for encashment through the Pampakuda branch of the Ernakulam District Co-operative bank, it returned dishonoured due to insufficiency of funds; he got back the cheque on 13.04.2010. On 16.04.2010, he caused to issue a lawyer notice demanding the amount; but the amount was not paid. Instead, Crl.Appeal No. 627 of 2013 3 the accused sent a reply denying liability and narrating a false story, that made him to approach the trial court. 3. On appearance and when particulars of offence were read over and explained, the first respondent pleaded not guilty. Thereafter, the appellant/complainant gave evidence as PW1 and Exts.P1 to P6 were marked. The first respondent was defended by a counsel of his choice. Still, for reasons best known to him, PW1 was not cross examined. Thereafter, the first respondent was examined under Section 313(1)(b) of the Code of Criminal Procedure, hereinafter referred to as the Cr.P.C.; he denied the incriminating circumstances and maintained that he had agreed to pay Rs.50,000/-, which alone was borrowed, with interest, within one month. There was no evidence in defence. After hearing counsel on both sides, by the impugned judgment, the learned Magistrate disbelieved the version of the appellant and gave a verdict acquitting the first respondent under Section 255(1) of the Cr.P.C. That finding is now called in question under Section 378(4) of the Cr. P.C., after obtaining leave. 4. I heard learned counsel on both sides. The learned counsel for the appellant submitted that the reasons stated by the learned Crl.Appeal No. 627 of 2013 4 Magistrate for acquitting the first respondent are erroneous and illegal. The first respondent had not raised serious dispute with regard to the Ext.P1 cheque. Still, basing on the version given at the time of examination under Section 313(1)(b) of the Cr.P.C., the complaint was dismissed. So the learned counsel prayed for reversing the finding. He also relied on the decision reported in **Basheer v. Usman Koya [2021 (2) KLT 567].** 5. On the other hand, the learned counsel for the first respondent defended the judgment of the trial court. According to him, execution of the cheque is not proved, merely by admitting signature on the document, no adverse inference can be drawn against the first respondent. Regarding the absence of details in the complaint also, he said, it is fatal for which he placed reliance on the decision in **Vijay v. Laxman and Another [ 2013(3) SCC 86]** . 6. After considering the materials on record, I am afraid, the learned Magistrate was completely mis-guided by the first respondent and such a finding cannot stand judicial scrutiny. It is true that the complaint does not contain details as to when the amount was lent, the time and place of the transaction, the conditions under which such an Crl.Appeal No. 627 of 2013 5 amount was paid, the previous relationship between the complainant and the accused etc. But in a prosecution under Section 142 of the Act, alleging offence punishable under Section 138, it is the consistent stand of the courts that such materials are not warranted, either in the complaint or in the notice. The most vital aspect in such a prosecution is whether, the subject cheque was executed and issued by the accused. If that part of the case of the prosecution is proved, that would automatically attract the presumptions under Sections 118 and 139 of the Act. Then the ball will pass to the court of the accused and if he does not discharge the burden, the Court will be entitled to draw the presumptions against him. In other words, it would be presumed that the cheque is supported by consideration and is issued in discharge of a legally enforceable liability. 7. As noticed earlier, PW1/the appellant was not cross examined by the counsel for the first respondent. All the incriminating materials were then put to the first respondent under Section 313 of the Cr.P.C. When a question was put about the Ext.P1 cheque bearing Rs.2,50,000, he denied the same. The next question was regarding the presentation of the cheque and that it was returned dishonoured, Crl.Appeal No. 627 of 2013 6 the first respondent replied that he had given a blank cheque. He also admitted the receipt of the notice. To the next question, he said that he had agreed to pay a sum of Rs.50,000/- with interest and that he had borrowed only Rs.50,000/-. He also replied that he has no evidence to adduce on his side. It is based on this evidence that the trial court proceeded to acquit the first respondent. According to the learned Magistrate, there is no mention in the complaint about the original transaction, that in the chief affidavit nothing has been stated about the original transaction by which the liability of the accused had arisen. Similarly, it was observed that the date, time and place of execution of cheque are also not mentioned. On that basis, the Magistrate concluded that the statement of PW1 does not inspire confidence. It has also been stated that mere signature of the accused on the cheque would not prove execution and that there is no evidence of any strong bond of friendship or relationship for parting with such a 'magnum amount'. On that basis, the first respondent was acquitted. 8. As mentioned earlier, absence of details of the transaction in the complaint or in the notice cannot be highlighted as a big issue to throw the complaint overboard. The appellant has stated that the first Crl.Appeal No. 627 of 2013 7 respondent had borrowed an amount of Rs.2,50,000/- from him, towards discharge of the same, the cheque was issued. It is not understood as to how the learned Magistrate could jump into such conclusions, especially when the first respondent had chosen not to cross examine the complainant. 9. Even otherwise, the accused cannot insist to give entire details of the transaction leading to the issuance of the cheque, either in the complaint or in the notice. Such details need be stated only if the complainant is falling back on the original transaction. A complaint alleging offence under Section 138 of the Act need not be based on the original transaction. When a similar plea was taken, this Court held in **Joseph Jose v J Baby and others [2002 (2) KLJ 332]** that there is absolutely no justification for discarding the complainant's case on the ground of improbability of the original transaction or want of pleading in that regard. ## 10. In **Uttam Ram v Devinder Singh Hudan and another [ 2019 (10) SCC 287]** the Hon'ble Supreme Court held thus:- “The Trial Court and the High Court proceeded as if, the appellant is to prove a debt before Civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for recovery Crl.Appeal No. 627 of 2013 8 of the amount due. A dishonour of cheque carries a statutory presumption of consideration. The holder of cheque in due course is required to prove that the cheque was issued by the accused and that when the same presented, it was not honoured. Since there is statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability.” The Supreme Court also reminded that there is the mandate of presumption of consideration in terms of the provisions of the Act; the onus shifts to the accused on proof of issuance of the cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability. 11. The apex court in **M/s. Kumar Exports v. M/s. Sharma Carpets [AIR 2009 SC 1518]** has given a vivid picture of presumption in favour of a holder of cheque, shifting the onus etc., thus: “9. In order to determine the question whether offence punishable under Section 138 of the Act is made out against the appellant, it will be necessary to examine the scope and ambit of presumptions to be raised as envisaged by the provisions of Sections 118 and 139 of the Act. In a suit to enforce a simple contract, the plaintiff has to aver in his pleading that it was made for good consideration and must substantiate it by evidence. But to this rule, the negotiable instruments are an exception. In a significant departure from Crl.Appeal No. 627 of 2013 9 the general rule applicable to contracts, Section 118 of the Act provides certain presumptions to be raised. This Section lays down some special rules of evidence relating to presumptions. The reason for these presumptions is that, negotiable instrument passes from hand to hand on endorsement and it would make trading very difficult and negotiability of the instrument impossible, unless certain presumptions are made. The presumption, therefore, is a matter of principle to facilitate negotiability as well as trade. Section 118 of the Act provides presumptions to be raised until 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. Section 139 of the 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 for the discharge, in whole or in part, of any debt or other liability. Presumptions are devises by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Indian Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) “may presume” (rebuttable), (2) “shall presume” (rebuttable) and (3) “conclusive presumptions” (irrebuttable). The term 'presumption' is used to designate an inference, affirmative or disaffirmative of the existence a fact, conveniently called the “presumed fact” drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or Crl.Appeal No. 627 of 2013 10 admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means “taking as true without examination or proof”. Section 4 of the Evidence Act inter alia defines the words 'may presume' and 'shall presume' as follows:- “(a) 'may presume' – Whenever it is provided by this Act that the Court may presume a fact, it may either regard such fact as proved, unless and until it is disproved or may call for proof of it. (b) ' shall presume' – Whenever it is directed by this Act that the Court shall presume a fact, it shall regard such fact as proved, unless and until it is disproved.” In the former cases the Court has an option to raise the presumption or not, but in the latter case, the Court must necessarily raise the presumption. If in a case the court has an option to raise the presumption and raises the presumption, the distinction between the two categories of presumptions ceases and the fact is presumed, unless and until it is disproved. 10. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or 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 Act, it becomes evident that in a trial under Section 138 of the Act a presumption Crl.Appeal No. 627 of 2013 11 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 once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.” 12. Secondly, the first respondent has not put forward any case at all, stating under what circumstance the cheque happened to be issued. He has merely stated that a signed blank cheque was given. Even the reply notice was not admitted in evidence, so that we are not in a position to gather what precisely is the version of the first respondent, regarding the transaction, which was given at the earliest possible opportunity afforded to him. 13. Moreover, the learned Magistrate was carried away by a statement given by the first respondent under Section 313 of the Cr.P.C. Of course examination of an accused under Section 313 of the Crl.Appeal No. 627 of 2013 12 Cr.P.C., not only provides an opportunity to explain the incriminating pieces of evidence appearing against him and also permits him to put forward his own version with regard to the circumstances in which he was dragged to a criminal proceedings. Here, before the trial court, there is the evidence tendered by the appellant as PW1 which is a statement given under oath, pitted against the statement of the first respondent under Section 313(1)(b) of the Cr.P.C. It is the settled proposition of law that statement given under Section 313 of the Cr.P.C cannot be treated as a substantive piece of evidence. Similarly, testimony given on oath by a witness cannot be rejected merely on the ground that it was contradicted by the statement of the accused made under Section 313 of the Cr.P.C. 14. The answers given by the accused in reply to questions under Section 313 of the Cr.P.C., are not per se evidence; they are not on oath; the prosecution does not get opportunity to verify the correctness of such statements, unless the accused takes oath and enters the box under Section 315 of the Cr.P.C., they do not get opportunity to cross examine. Here the counsel for the first respondent did not cross examine the appellant, when he took oath and gave Crl.Appeal No. 627 of 2013 13 evidence as PW1. Secondly, no evidence is tendered by the first respondent in support of his version that the cheque was given only in consideration of Rs.50,000/-. 15. Worsening the case of the first respondent, when examined under Section 313 of the Cr.P.C., the respondent admitted having issued the cheque in a signed blank form. Even in such a situation, the liability under Section 138 of the N.I.Act cannot escape him. In **Bir** **Sing v. Mukesh Kumar [AIR 2019 SC 2446]** , the Hon'ble Supreme Court has held as follows:- - “37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, S. 20, S.87 and S.139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of S. 138 would be attracted. 38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.” 16. This decision has been followed and reiterated in Crl.Appeal No. 627 of 2013 14 ## **Kalamani Tex and Another v. Balasubramanian P. [ILR 2021 (1)** **Kerala 855]** , where it is held that even if the argument that only a blank cheque was issued on its face value, still the statutory presumptions under Sections 118 and 139 of the N.I. Act cannot be obliterated. 17. In my assessment, in this setting, the learned Magistrate has gone estray in acquitting the first respondent. Having regard to the circumstances he should not have been acquitted. After having admitted that the Ext.P1 cheque was issued by him, in the absence of a plausible and satisfactory explanation, the trial court ought to have drawn the presumptions under Sections 118 and 139 of the Act. The court went wrong in taking the statement given by first respondent under Section 313 of the Cr.P.C. as gospel truth and acquitting him from liability. That finding requires interference in appeal. In the result, the appeal is allowed. The first respondent is found guilty and convicted under Section 138 of the N.I.Act and sentenced to pay a fine of Rs.2,50,000/- (Two lakhs and fifty thousand only) in default to undergo simple imprisonment for six months. When realised, the amount shall be paid as compensation to the appellant. If Crl.Appeal No. 627 of 2013 15 the amount is not tendered within two months from the date of receipt of a copy of the judgment, the trial court shall initiate coercive proceedings. Sd/- **K.HARIPAL JUDGE** DCS/12.04.2021-28/5