K.Kamalakshi v. Harichandra H. and State of Kerala

## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 6TH JULY 2010 / 15TH ASHADHA 1932 Crl.Rev.Pet.No. 1878 of 2010() -----------------------------CRA.7/2009 of SESSIONS COURT, KASARAGOD CC.298/2008 THE JUDICIAL FIRST CLASS MAGISTRATE COURT-II, KASARAGOD .................... ## REVN. PETITIONER: PETITIONER/APPELLANT/ACCUSED ------------------------------------------------- K.KAMALAKSHI, AGED 59 YEARS, W/O. PADMANABHAN, TEACHER, RESIDING AT 55TH MILE, THEKKIL VILLAGE, THEKKIL PARAMBA, KASARGOD DISTRICT. BY ADV. SRI K. RAMAKUMAR (SENIOR) & M/S. T.RAMPRASAD UNNI J.R.PREM NAVAZ VINOD.V (EDAPPUNATHIL) & SMT.SMITHA GEORGE RESPONDENT(S): --------------- 1. HARICHANDRA.H., AGED 61 YEARS, S/O. RAMAKRISHNA B., RESIDING AT NEAR CATHOLIC CHURCH, HOSDURG , KANHANGAD, HOSDURG TALUK, KASARGOD DISTRICT. 2. STATE OF KERALA, REPRESETED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM R2 BY P.P. SMT. PUSHPALATHA M.K. THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 23/06/2010, THE COURT ON 6/7/2010 PASSED THE FOLLOWING: ## **V.K.MOHANAN, J.** ## **---------------------------------------Crl.R.P. No. 1878 of 2010** **----------------------------------------** Dated the 6[th] day of July 2010 ## **ORDER** The accused in a prosecution for the offence under section 138 of the Negotiable Instruments Act (hereinafter referred for short 'the N.I.Act'), is the revision petitioner as she is aggrieved by the order of conviction and sentence imposed against her by the courts below as per its impugned judgments. 2. The case of the complainant is that he is the owner and manager of several educational institutions including English Medium Nursery and Primary Schools in Kasaragode district and Viswajnan Nursery school Chattanchal and the husband of the accused was working as Principal of School at Chatanchal after his retirement from Government Service and the accused is also known to the complainant for several years who was also working as a Teacher in Thekkil Paramba Govt.U.P.School. Thus according to the complainant, out of such acquaintance, the CRL.R.P. 1878/10 **-:2:-** accused borrowed a sum of Rs.6.50,000/- as a loan from the complainant in four instalments with a promise to repay the same within six months. According to the complainant, the said amount was borrowed for the purpose to establish a school at Aragonda in Andhra Pradesh. According to the complainant, after the expiry of six months, from the date of availing of loan the accused was requested to return the amount and accordingly, she issued a cheque dated 23.1.2008 for Rs.6,50,000/- from the house of the accused. Thus, according to the complainant, when the above cheque presented for encashment, it was dishonoured for the reason of insufficient fund in the account maintained by the accused and the amount covered by the cheque was not paid even after a statutory notice sent in this regard. Therefore, according to the complainant, the accused has committed the offence punishable under section 138 of the N.I Act. 3. With the said allegation, the complainant approached the Court of Judicial First Class Magistrate-II, (Additional Munsiff), Kasaragode by filing a complaint upon CRL.R.P. 1878/10 **-:3:-** which cognizance was taken under section 138 of the N.I.Act and instituted C.C.No.298/2008. During the trial, the complainant himself mounted to the box and adduced oral evidence as PW1 and besides that he had also produced documentary evidence which are marked as Exts.P1 to P6. The accused herself also mounted to the box and gave evidence, to substantiate her version, as DW1. No documents is produced. On the basis of the available materials and evidence on record, the trial court found that the accused has admitted that an amount of Rs.1,00,000/was obtained from the complainant and as per her evidence, she agreed to repay an amount of Rs.1,40,000/- and it is also found that the issuance of cheque to the complainant and the signature on the same are not disputed. Thus the trial court has found that the accused had executed and issued Ext.P1 cheque to the complainant and the same was issued towards the discharge of a legally enforceable debt. Accordingly, the accused is found guilty and she is convicted under section 138 of the Act. Consequently, she is sentenced CRL.R.P. 1878/10 **-:4:-** to undergo simple imprisonment for a period of 3 months and she is further directed to pay an amount of Rs.6,50,000/- as compensation under section 357(3) Cr.P.C and the default sentence is fixed as simple imprisonment for one month. 4. Aggrieved by the above finding, order of conviction and sentence, though the accused-revision petitioner had filed an appeal, by judgment dated 22.5.2010 in Crl.A.No.7/2009, the court of Sessions, Kasaragode allowed the appeal only in part and thus, while confirming the conviction, the sentence of simple imprisonment is reduced to one day, i.e., till the rising of the court and the order to pay compensation is confirmed, but the default sentence is enhanced and directed her to undergo simple imprisonment for 6 months. It is the above verdicts of the courts below and the conviction and sentence imposed against the accusedrevision petitioner are challenged in this Crl.R.P. 5. I have heard Sri K.Ramakumar, the learned Senior Counsel appearing for the revision petitioner and also perused the judgments of the courts below. CRL.R.P. 1878/10 **-:5:-** 6. Sri K.Ramakumar, learned Senior Counsel in his persuasive arguments submitted that the complainant has miserably failed to establish the allegation in the complaint, particularly, the claim regarding the transaction. The learned counsel submitted that the complainant has not established the actual transaction, and he failed to mention the date of the transaction, either in the complaint or in the statutory notice. Reiterating the stand of the defence during the trial and the appellate stages, the learned counsel submitted that the accused has established her plea, that the cheque was issued on account of the pressure exerted by the complainant, as the complainant has advanced some money for the establishment of a school at Aragonda in Andhra Pradesh on partnership basis and subsequently, the complainant withdrew from such project and he pressed for the return of the money and through intervention of the mediators, the accused has agreed to return only a sum of Rs.1,40,000/-, but the complainant insisted that a cheque for Rs.6,50,000/- should be given as security. According to the learned counsel, CRL.R.P. 1878/10 **-:6:-** the accused had paid a sum of Rs. 1,40,000/- as per the above settlement but the cheque which was issued as a security was not returned and the same is misused for filing the present complaint. Thus according to the learned counsel, there was no financial liability or debt due to the complainant from the accused and as such, there was no debt or liability which legally enforceable, in favour of the complainant. It is also the contention of the learned counsel that the case of the complainant cannot be believed as such as he was not capable to lend a sum of Rs.6,50,000/- since he was not an income tax assessee. It is also the case of the learned counsel that the case of the complainant that he had parted with a sum of Rs.6,50,000/- in cash would be a violation of the Income Tax Act and Rules, since the law permits cash transaction only to a limit of Rs.20,000/-. In his argument, the learned Senior Counsel emphatically submitted that the accused has succeeded in establishing a probable case that the transaction is connected with the establishment of a school in Andhra Pradesh which was admitted by the CRL.R.P. 1878/10 **-:7:-** complainant and therefore, the case of the defence that the said project was a joint venture and the complainant has agreed to become an office bearer of the school proposed to establish, is correct and hence, the courts below ought to have held that the accused has established the case with all probabilities and according to the learned counsel, the trial court is wrong in holding that it was for the accused to explain the circumstances under which the cheque was issued. So, according to the learned counsel, it was for the complainant to establish the transaction with respect to the project for starting school and the contra findings of the courts below are perverse and legally unsustainable. In support of the above submission, the learned counsel very much placed reliance upon the following decisions: **Kumar Exports v. Sharma Carpets** (2009 (1) KLT 197 (SC); **Bhaskaran Nair v. Mohanan** (2009(2) KLT 897); **Shaji v. Ignatious** ( 2009(2) KLT 491) and **Shaju v. Paulose** (2009 (4) KLT SN 49 (C.No.44). 7. I have carefully considered the arguments advanced CRL.R.P. 1878/10 **-:8:-** by the learned Senior counsel and also closely perused the judgments of the courts below and gone through the authorities cited during the hearing of the matter. 8. The specific case of the complainant is that the accused and her husband were closely known to the complainant and they were closely associated. It is out of the said acquaintance, according to the complainant, the accused demanded for hand loan for the purpose of starting school in Andhra Pradesh, and according to the complainant, he released the amount out of such acquaintance and further on their promise to repay the same within 6 months. It is with the above allegation in the complaint, the complainant approached the trial court and during the trial of the case, he produced the cheque in question, i.e. Ext.P1 dated 23.1.2008 which covers for an amount of Rs.6,50,000/- from his possession. In support of the allegation in the complaint, the complainant himself mounted to the box and adduced oral evidence as PW1 and besides that he had produced Exts.P1 to P6 documents. Though the defence had not produced any CRL.R.P. 1878/10 **-:9:-** document as defence exhibits, the revision petitioner-accused herself mounted to the box as DW1 and she had deposed in terms of her defence in the case. 9. The trial court, on the basis of the rival pleadings, formulated 3 points for its consideration among which the first point is whether Ext.P1 cheque was issued by the accused to the complainant in discharge of a legally enforceable debt . The finding was in favour of the complainant. The finding of the trial court on the above issue is purely based upon the evidence and materials on record and after the consideration of the case of the complainant and the defence, and such finding is approved by the lower appellate court after reappreciation of the entire materials and evidence on record. It is the above concurrent findings sought to be interfered with by this Court in exercise of the revisional jurisdiction of this Court 10. On a consideration of the facts and circumstances involved in the case, especially, in the light of the submission made by the learned senior counsel, the question to be CRL.R.P. 1878/10 **-:10:-** considered is whether the courts below are justified in their finding that the complainant has established his case and also the conclusion arrived by the courts below that the accused has failed to rebut the presumption. The leaned senior counsel submitted that there is no averment either in the complaint or any assertion in the lawyer notice regarding the actual date of the alleged borrowal of loan by the revision petitioner and the mode of paying off the amount by the complainant. According to me, those facts are relevant only when the parties are strangers and the accused in a prosecution for the offence under section 138 of the N.I.Act denying the entire transaction claimed by the complainant. Therefore, it can be seen that the dispute in the present case is in a narrow compass. The complainant's allegation and claim is that out of friendship and close association, he parted with a sum of Rs.6,50,000/-to the accused for the purpose of establishing a school at Aragonda in Andhra Pradhesh and towards the discharge of that liability, accused issued Ext.P1 cheque. The case of the CRL.R.P. 1878/10 **-:11:-** accused is that there was an agreement to establish a school at Aragonda in Andhra Pradesh in partnership with the complainant and the complainant contributed an amount of Rs.1,00,000/- as his share and the steps towards the establishment of the school was in progress but there was a set back due to the death of her husband and therefore the complainant withdrew from the said project and demanded for repayment of the amount invested by him and according to the accused, as per the settlement between the parties, the amount due to the complainant was quantified as Rs.1,40,000/- and in order to ensure the payment, the accused issued a signed blank cheque. It is the further case of the accused that she could not repay the amount within two months as agreed, however, she paid the amount within 4 months, and even though the payment of Rs.1,40,000/- was made belatedly, the complainant did not return the cheque in question claiming an additional amount of Rs.25,000/-. From the above, it can be seen that the revision petitioner while admitting the execution and CRL.R.P. 1878/10 **-:12:-** issuance of the cheque, according to her, the same was issued not for the purpose or connected with the transaction as claimed by the complainant. Thus, the learned counsel for the revision petitioner submitted that in the light of the specific plea raised by the accused, it is for the complainant to establish his case satisfactorily with sufficient materials and evidence. I am unable to accept the above argument. Sections 118(a) and 139 of the N.I.Act deals with presumption. In order to avail the said presumption, it is sufficient if the complainant-holder of the cheque establishes a prima facie case. In the present case, according to the trial court as well as the lower appellate court, the complainant has established his initial burden by establishing a prima facie case and therefore he is entitled to get the presumption under section 139 of the N.I.Act. In this juncture, it is also relevant to note that by producing Ext.P1 cheque, the complainant himself has stated the circumstances under which Ext.P1 cheque reached in the hands of the complainant. Therefore , it is for the revision petitioner/accused to rebut the CRL.R.P. 1878/10 **-:13:-** presumption. Hence what is to be examined is how far the accused has succeeded in discharging her burden of rebutting the presumption. In the present case, except the ipsi dixit of DW1, no other evidence, either oral or documentary, produced by her to substantiate her case. There is no document or independent evidence regarding the joint venture for the establishment and running of the school in Andhra Pradesh, there is no details regarding the liability or initial investment of the partners etc., no agreement for the partnership produced, there is also no evidence regarding the alleged settlement arrived on between the complainant and the accused, though it is claimed that settlement was arrived at the instance of mediators, no such person was examined. Therefore, it can be seen that though the accused had taken a specific plea, the same was not established or materialised. The falsity of the defence case is exposed by the trial court in the following words: “From the evidence of both parties it can be seen that some transaction was taken place between parties. The accused admitted CRL.R.P. 1878/10 ## **-:14:-** that Rs.1,00,000/-(Rupees one lakh only) was obtained from the complainant. But there is no evidence in support of the contention of the accused that the amount was obtained as part of a partnership venture. There is no record to prove that the complainant was a partner of the school or any office bearer of the school. In such circumstances, the contention of the accused that the complainant was the partner of the school cannot be accepted. Besides if the cheque was issued after a mediation as contended by the accused, the probability of issuing a signed blank cheque is also is doubtful. Here the accused has admitted that an amount of Rs.1,00,000/- (Rupees only lakh only) was obtained from the complainant and as per her evidence she agreed to repay the amount of Rs.1,40,000/- (one lakh fourty thousand only) to the complainant. Besides, the issuance of cheque to the complainant is not a disputed one and signature on it also not disputed”. If actually, there was a settlement and the liability was quantified, there is no answer as to why the accused issued a blank cheque as security. It is true that the Apex Court, in the decision reported in **Kumar Exports v. Sharma Carpets** (2009 (1) KLT 197 (SC), has held that the CRL.R.P. 1878/10 **-:15:-** purpose of the presumption is over when the accused has produced evidence fairly and reasonably tending to show that the real fact is not as presumed. On application of the above dictum in the present case, it can be seen that the presumption which was available in favour of the complainant has not been rebutted by the accused by producing evidence fairly and reasonably to show that the real fact is not as presumed. So, the above decision cited by the learned senior counsel for the revision petitioner would go against him in the light of the facts and circumstances involved in the present case. Another decision relied on by the learned senior counsel is **Bhaskaran Nair v. Mohnan** (2009 (2) KLT 897) and this decision is not applicable in the present case, because the facts and circumstances involved in the preset case is entirely different from the said case. In the present case, the execution and issuance of the cheque is not disputed by the accused though it was not admitted as in terms of the claim of the complainant. For the same reasons stated above, the decision reported in **Shaju v. Paulose** CRL.R.P. 1878/10 ## **-:16:-** (2009(4) KLT SN 49 (C.No.44) is also not applicable. Another decision relied on by the counsel for the revision petitioner is **Joseph v. State of Kerala** (2009(3) KLT SN 28 (C.No.30). In the said decision, this Court has held that “merely on the basis of the presumptions covered by the Statute and the burden cast for displacement of such statutory presumptions by rebuttal evidence, it cannot be stated that the case of the complainant deserves acceptance”. In the present case, the benefit of presumption is extended by virtue of the fact that the complainant has established a prima facie case through his oral evidence and by producing the documentary evidence including the cheque in question. When the accused admits the execution and issuance of the cheque, she is bound to establish that the same was done under the circumstances which she relied. It is relevant to note that this court, in **Johnson Scaria v. State of Kerala (2006 (4) KLT 290)** has held: CRL.R.P. 1878/10 ## **-:17:-** “The burden is always on the prosecution to prove the offence against an indictee in all prosecutions and a prosecution under section 138 of the N.I.Act is no exception to that general rule. Execution and issue of the cheque have to be proved to draw the presumption under S.139 and S.139 does not shift the burden to prove execution and issue of the cheque. Admission of signature in a cheque goes a long way to prove due execution. Possession of the cheque by the complainant similarly goes a long way to prove issue of the cheque. The burden rests on the complainant to prove execution and issue. But under S.114 of the Evidence Act appropriate inferences and presumptions can be drawn in each case on the question of execution and issue of the cheque depending on the evidence available and explanations offered” In the present case, according to me, as rightly held by the courts below, the complainant has established his case and the evidence produced by him, and the explanation offered has justified the finding of the courts below. But the mere explanation offered from the side of the accused is not sufficient to rebut the presumption available in favour of CRL.R.P. 1878/10 **-:18:-** the complainant. 11. In the present case as indicated earlier, the complainant has adduced oral evidence stating the acquaintance with the accused and their close association and the circumstances under which the loan was given to the accused and the accused issued the cheque in question and the complainant has produced the signed cheque of the accused from his possession. The accused has also admitted the execution and issuance of the cheque. Though the accused has taken a different view and plea, the same is not established and, falsity of the defence version is further clear from the claim of the accused that even after settlement of the issue, the blank signed cheque was issued. 12. Under the above factual background, the two inferior courts which are the fact finding authorities, found the case in favour of the complainant and against the accused and such finding is not on the basis of the weakness of the defence case but on her inability to establish at least a reasonable and probable case. Therefore, the courts below CRL.R.P. 1878/10 **-:19:-** cannot be blamed for considering the defence version and its materials, while appreciating the case of the complainant. Hence, I am of the view that the courts below are proper, correct and legal in accepting the case of the complainant and holding that the revision petitioner-accused has failed to rebut the presumption. Therefore the concurrent findings and conviction recorded by the courts below against the revision petitioner is only to be approved and I do so. 13. Regarding the sentence, it has to be noted that though the trial court imposed a sentence of simple imprisonment for 3 months, the lower appellate court has reduced the same to imprisonment till the rising of the court whereas the order to pay compensation of Rs.6,50,000/- is maintained and the lower appellate court has just enhanced the default sentence and fixed the same as 6 months. 14. In the memorandum of this Crl.Revision Petition, particularly under ground No.7, a contention is taken to the effect that as there is no previous incident of involving the petitioner in any criminal case, the courts below ought to CRL.R.P. 1878/10 **-:20:-** have extended the benevolent provisions of the Probation of Offenders Act in favour of the revision petitioner. According to me, the liability contemplated under the provisions of N.I.Act is not purely a criminal liability. On conviction, if the convictee is let off on admonition, the purpose sought to be achieved by the very enactment of Section 138 of the N.I.Act cannot be materialised unless specific pleadings and evidence established in this regard. In the present case, the revision petitioner is a retired Government School Teacher and she had also admitted the transaction, which involved lakhs of rupees, even though not as claimed by the complainant. As per Section 138 of the N.I.Act, among the penalty contemplated, sentence of imprisonment is not mandatory. 15. The Apex Court, in its recent decision in **Damodar S.Prabhu v. Sayed Babalal H** (J.T.2010 (4) SC 457), has held that in a case of dishonour of cheques, compensatory aspect of the remedy should be given priority over the punitive aspect. The revision petitioner is a woman CRL.R.P. 1878/10 ## **-:21:-** who was working as a teacher and now crossed the age of 59 years. In the light of the above settled position of law and the facts indicated above, I am of the view that the sentence of imprisonment imposed against the revision petitioner can be set aside and at the same time, the compensation amount can be enhanced slightly and she can be granted 3 months time to pay the compensation amount. In the result, this Crl.Revision Petition is disposed of confirming the conviction of the revision petitioner under section 138 of the N.I Act as recorded by the trial court as well as the lower appellate court. Accordingly, the sentence of imprisonment imposed against the revision petitioner is set aside and she is directed to pay a sum of Rs.6,65,000/(Rupees Six lakhs and sixty five thousand only) as compensation to the complainant under section 357(3) of Cr.P.C within three months from today, and in default in paying the compensation amount, she is directed to undergo simple imprisonment for a period of 6 months. The revision petitioner is free to pay the compensation amount either CRL.R.P. 1878/10 ## **-:22:-** directly to the complainant or by remitting the same in the trial court, however, subject to the satisfaction of the learned Magistrate. Accordingly, the revision petitioner is directed to appear before the trial court on 5[th] October, 2010. If there is any default on the part of the revision petitioner in appearing before the trial court as directed above, the trial court is free to take coercive steps against the revision petitioner to secure her presence and to execute the sentence and for realisation of the amount. The coercive steps, if any, pending against the revision petitioner shall be deferred till 5[th] October,2010 In the result, the Crl.Revision Petition is disposed of accordingly. **V.K.MOHANAN JUDGE.** **Kvm/-** CRL.R.P. 1878/10 ## **-:23:-** O.P.No. **JUDGMENT** ## CRL.R.P. 1878/10 ## **-:24:-** Dated:..