K.N. Ponnappan v. Muhammed Salim and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MRS. JUSTICE M.C.HARI RANI FRIDAY, THE 2ND SEPTEMBER 2011 / 11TH BHADRA 1933 CRL.A.No. 989 of 2004 ----------------------- CC.100/1999 of JUDL.MAGISTRATE OF FIRST CLASS-II, THAMARASSERY .................... APPELLANT/ COMPLAINANT. -------------------------- K.N.PONNAPPAN, KUTTANTHERESHEL VEEDU, THIRUVAMBADY, KOZHIKODE DISTRICT. BY ADV. SRI.KALEESWARAM RAJ RESPONDENTS: ACCUSED AND STATE. --------------------------------- 1. MUHAMMED SALIM, PUTHUVAYALIL VEEDU, PULLURAMPARA, KOZHIKODE DISTRICT. 2. STATE OF KERALA, REP. BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. ADV. SRI.P.V.KUNHIKRISHNAN FOR R1 R2 BY PUBLIC PROSECUTOR MR. PUZHAKKARA MUHAMMED THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 20/6/2011,THE COURT ON 2/9/2011 DELIVERED THE FOLLOWING: ## **M.C. HARI RANI, J.** ## **======================** ## **CRL.A. NO.989 OF 2004** ## **=======================** ## **Dated this the 2[nd] day of September 2011** ## **JUDGMENT** The appellant, the complainant in C.C. 100/1999 on the file of the Judicial First Class Magistrate-II, Thamarassery filed this appeal challenging the order of acquittal of the respondent/accused for the offence under Section 138 of the Negotiable Instruments Act. 2. The case of the appellant in the complaint filed before the learned Magistrate was that on 1/6/1998 the respondent borrowed Rs.44,000/- from the appellant and handed over the post dated Ext.P1 cheque, in the presence of witnesses and also promised its encashment on presentation before the Bank on 30/1/1999. The cheque when presented for encashment was dishonoured due to insufficiency of funds in the account of the respondent. CRA 989/2004 -2- After getting that intimation, the appellant issued lawyer notice on 11/2/1999 which was received by the respondent on 13/2/1999. The respondent neither send any reply nor repaid the amount and the complaint was filed by the appellant before the lower court. 3. The respondent pleaded not guilty. The appellant was examined as PW2. Two other witnesses were examined on the side of the appellant as PWs.1 & 3 and Ets.P1 to P8 were also marked. One witness was examined on the side of the respondent as DW1 and Exts.D1 & D2 were marked. The learned Magistrate on the evidence found that the appellant did not establish that respondent had borrowed Rs.44,000/- on 1/6/1998 as claimed by him and issued Ext.P1 cheque towards its repayment. It was concluded that the appellant was not able to prove that Ext.P1 cheque was issued in discharge of a legally recoverable debt. In that view of the matter, the respondent was found not guilty and acquitted of the indictment. CRA 989/2004 -3- 4. Heard the learned counsel for the appellant and the learned counsel for the first respondent. Heard the learned Public Prosecutor also. 5. The learned counsel for the appellant assailed the judgment of acquittal and submitted that the learned Magistrate had misappreciated the facts and evidence tendered in the case. It is argued that there was no denial of execution of Ext.P1 cheque by the respondent and it was admitted that the cheque, Ext.P1 belonged to him which contained his signature. Then, it is for the respondent to rebut the presumption available to the appellant under Sections 118 & 139 of the N.I. Act. The learned counsel vehemently argued that the respondent though received the lawyer notice issued by the appellant, no reply has been sent by him and the respondent was not examined. The order of acquittal of the accused is illegal and unsustainable, it is submitted. The learned counsel for the first respondent supported the judgment of acquittal. CRA 989/2004 -4- 6. The point for consideration in this appeal is whether Ext.P1 cheque was issued to the complainant by the accused to discharge any liability. The specific defence case put forward in the cross examination of PW2,the complainant, and also in the evidence adduced from the side of the defence, both oral and documentary is to the effect that the accused had never borrowed any amount from the complainant and Ext.P1 cheque was not supported by consideration. 7. In the complaint and in the lawyer notice, Ext.P5, the case put forward by the complainant was that on 1/6/1998 the accused borrowed Rs.44,000/- from him agreeing to repay the same by 30/1/1999 and issued the post dated cheque,Ext.P1 on the same day in the presence of witnesses. The complainant as PW2 has deposed before court that the amount of Rs.44,000/- was borrowed by the accused on 1/6/1998 from his house and agreed to repay the amount on 30/1/1999. After receiving the amount, the accused handed over the cheque with date 30/1/1999 CRA 989/2004 -5- drawn in his account before Thiruvambady Co-Operative Bank, Pullurampara Branch. According to PW2 at that time Vadakkanattu Gopinathan and Kudilum Mattathil Sasidharan (PW3) were present. The testimony of PWs.2 and 3 regarding the alleged transaction is contradictory. It is admitted by PW2 in the cross examination that on 7/2/1998 there was agreement between himself and the accused for exchange of landed properties between them and one Bhavani Sivaraman. As per that karar the complainant had to pay Rs.1,25,000/- to the accused and PW2 paid Rs.5,000/- as advance on the same day. But that exchange of landed properties did not materialise and PW2 did not give Rs.1,20,000/- to the accused as agreed in the karar. There was mediation talk regarding the sale of properties from the house of PW2 on 2/5/1998 and at that time Rs.58,000/- was due from the accused to him. It was then decided to withdraw from the agreement of exchange of properties. Rs.58,000/- was not paid by the accused to him. To such a defaultee - accused from whom Rs.58,000/- CRA 989/2004 -6- was due, another amount of Rs.44,000/- was given by PW2 on 1/6/1998. This cannot be believed and highly improbable. One prudent man cannot swallow it as such. 8. PW3 was examined on the side of the complainant to prove Ext.P8 which according to the complainant was prepared during mediation regarding the money transaction between himself and the accused. PW3 was present during mediation and also signed in Ext.P8 as a witness. But no such allegation was there in the complaint and no such testimony also before court when complainant was examined as PW2. According to PW3, he did not see the actual payment of the amount by the complainant to the accused and on that day when Ext.P8 was signed, no amount has been received by the accused from the complainant and he did not witness the same and he saw the handing over of the cheque as the security. He knew that there was karar between the complainant and the accused regarding exchange of property and the mediation talk was in respect of that karar. During that mediation, CRA 989/2004 -7- Ext.P8 agreement was executed and Ext.P1 was handed over as security. Thus, it is crystal clear from the evidence of PW3 that on 1/6/1998 no amount has been borrowed by the accused from the complainant as alleged in the complaint and Ext.P1 cheque was not supported by consideration. The case of the complainant that the cheque was handed over by the accused from the house of the complainant cannot be believed. Instead, the testimony of PW3 that the cheque was handed over from the office of the document writer is more probable which would also establish the defence case that a signed blank cheque leaf was handed over by the accused to the complainant in connection with the property transaction. 9. DW1, the Manager in charge of Thiruvambady Service Co-Operative Bank Pullurampara Branch was examined on the side of the accused to prove that the account was opened by the accused before that bank on 1/6/1998 and only one cheque leaf was issued to him on that day. This witness was not cross examined by the CRA 989/2004 -8- complainant. This also will throw light to the defence case that a signed blank cheque was handed over by the accused to the complainant on 1/6/1998 during mediation in the property transaction entered into between them earlier. The accused has specifically denied the execution of the disputed cheque, Ext.P1 in favour of the complaint. It is true that the accused has admitted that Ext.P1 cheque belongs to him and it contains his signature. That does not mean that the entire transaction put forward by the complainant and the execution of the cheque as such has been admitted by the accused. The defence case is that the blank signed cheque handed over by the accused to the complainant on 1-6-1998 during mediation in respect of the exchange of property which was not materialised has been misused by the complainant and no amount has been borrowed by the accused from the complainant on 1-6-1998. Thus the definite case of the accused was that the cheque given to the complainant for another transaction was misused by the complainant and not in discharge of a CRA 989/2004 -9- legally enforceable debt and as such no offence under Section 138 of the Negotiable Instruments Act has been committed by the accused. 10. The complainant as PW2 has also admitted that there was some understanding between the complainant and the accused regarding exchange of their landed property. According to PW2, a karar was executed for the same on 7-2-1998. The sale did not take place. There was some mediation in respect of the same which took place from his house on 2-5-1998 and on that day Rs.58,000/- was due from the accused to him. To such a defaultee the complainant would again advance Rs.44,000/- as loan on 1-6-1998 cannot be believed and is improbable. So also Ext.P8 and the testimony of PW3 arose some suspicious circumstances against the genuinity of the disputed cheque, Ext.P1 and no satisfactory explanation has been tendered by the complainant for removing the suspicion. 11. Section 139 of the N.I.Act provides that it shall be presumed unless the contrary is proved, that the holder of a CRA 989/2004 -10- 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. The presumption so provided under Section 139 of the Act shall be brought in a case where the accused either admits the drawing of the cheque or the complainant establishes that it was drawn by the accused. If there is no admission and there is no proof of execution of the cheque, the presumption provided under Section 139 of the Act cannot be drawn and in such case, it is to be independently proved. 12. Considering the facts and circumstances of this case, it will be probable to take note of the following decisions rendered by the Apex Court and cited by the learned counsel for the respondent/accused **.** **1. Narayana Menon v. State of Kerala[2006(3) K.L.T.404(SC]** **2. Krishna Janardhanan Bhat v. Dattatraya Hegde[2008(1)K.L.T.425(SC)** Regarding to the extent of burden cast upon the accused to CRA 989/2004 -11- rebut the presumption arising under Section 139 of the N.I.Act was observed in the decision in **Narayana Menon** (supra) that “For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on records but also by reference to the circumstances upon which he relies.” In **Krishna Janardhanan** (supra), it was observed as follows: “An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on records. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. Furthermore, whereas prosecution must prove the guilt of an accused CRA 989/2004 -12- beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is ‘preponderance of probabilities.’ 13. It is not the signing of the cheque, but its execution that is necessary to draw the presumption under Section 139 of the N.I.Act. If only execution is established, then only the presumption follows that it has been issued towards discharge of a debt or liability. Execution of the instrument is not a physical act of signing the instrument but of drawing that instrument with the intent to do so. No doubt, there will be cases of obtaining blank signed cheques as security for loan transaction. In such a case, mere signing of the instrument cannot be considered as execution of the instruments. But, of course, when the instrument is admitted as duly signed, a burden is cast on the accused to place materials for substantiating his/her evidence to rebut the presumption under Section 139 of the N.I.Act that the instrument has not been executed towards discharge of a debt or liability. Where the accused has discharged the CRA 989/2004 -13- burden by producing materials or from the circumstances presented in the case, showing that the defence case pleaded is more probable, unless and until the complainant establishes due execution of the cheque and the transaction as alleged, no conviction is permissible by drawing the presumption under Section 139 of the N.I.Act. In this case, the execution of the disputed cheque, Ext.P1 has not been proved by valid and acceptable evidence by the complainant. The complainant as PW2 only deposed that the cheque was given to him by the accused. He has no case that the cheque was written or signed by the accused in his presence. This is not sufficient to prove the execution. The case of the accused that there was no debt due to the complainant or liability to be discharged by him and Ext.P1 cheque is not supported by consideration is more probable. Having regard to all the circumstances of the case, I find that the presumptions under Sections 118 and 139 of the Act will not come to the rescue of the complainant. The sole reason that no reply has been sent CRA 989/2004 -14- by the accused to the lawyer notice issued by the complainant cannot be accepted as a ground to draw the presumption in favour of the complainant. All these aspects were considered by the learned Magistrate and found that the complainant has failed to establish that Ext.P1 cheque was issued in discharge of a debt and legally enforceable liability. Accordingly, the accused was found not guilty and acquitted under Section 255(i)Cr.P.C. I find no reason to interfere with that finding entered into by the learned Magistrate and the same is confirmed. 14. In the result this appeal is dismissed. . Sd/- ## **M.C. HARI RANI, JUDGE** ## **ks.** TRUE COPY P.S. TO JUDGE