K.P. Stanly v. T.J. Varghese and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 28TH OCTOBER 2008 / 6TH KARTHIKA 1930 CRL.A.No. 33 of 2005() ---------------------CC.183/2000 of JUDL.MAGISTRATE OF FIRST CLASS-II, ERNAKULAM .................... APPELLANT(S): -------------- K.P.STANLY, S/O.K.O.PAPPU, KOLAPPILLIL HOUSE, P.H.EXTENSION ROAD, KOCHI-18. BY ADV. SRI.VARGHESE C.KURIAKOSE SRI.PRAVEEN K. JOY SMT.THANKOM.G SRI.E.M.MURUGAN RESPONDENT(S): --------------- 1. T.J.VARGHESE, THENGAPURACKAL, TECHNICAL II, SENIOR SECTION ENGINEER (C & W) OFFICE OF SOUTHERN RAILWAY, ERNAKULAM JUNCTION. 2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, ERNAKULAM. ADV. SRI.DENY JOSEPH FOR R1 R2 by PUBLIC PROSECUTOR SRI P.A. SALIM THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 28/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **V.K.MOHANAN, J. ====================== CRL.A.NO.33 OF 2005 ======================= Dated 28[th] October, 2008** ## **JUDGMENT** This appeal is filed by the complainant in C.C.No.183 of 2000, a proceedings initiated under section 138 of the Negotiable Instruments Act wherein the accused was acquitted by the trial court under section 255(1) of Cr.P.C. 2. The case of the complainant is that the accused borrowed a sum of Rs. 5,00,000/- from the complainant during the year 1999 and towards the discharge of the above debt, the accused issued a cheque dated 1.9.99 for Rs.5,00,000/-(five lakhs only) and when the cheque was presented for encashment, the same was dishonoured for want of sufficient funds in the account of the accused. Accordingly, the court took cognizance and instituted CC No.183/2000 in the court of Judicial First Class Magistrate-II, Ernakulam. When the accused appeared, particulars of the allegations were read over to him and he pleaded not guilty. Subsequently, during the trial, complainant himself was examined as PW.1. Exts.P1 to P6 were marked from the side of the defence, DW.1 was examined and Exts.D1 and D2 were marked. During the Crl.A.33/2005 ## **:-2-:** trial, the accused took a stand of total denial and it is the further case of the accused that the complainant has not that much financial soundness and capacity to part with such a huge amount and therefore the case of the complainant as such is false. Based upon the rival contentions and pleadings, the court below formulated the following issues for its consideration: “i. whether the accused issued Ext.P1 cheque for the discharge of a legally enforceable debt?' ii. whether the accused complied with the statutory formalities contemplated under section 138 of the Act ?. iii. Whether the accused committed the offence punishable under section 138 of the N.I.Act? “ 3. Under issue No.2, the trial court found that the complainant had complied with statutory formalities and thus that point is held in favour of the complainant. But in the case of the first issue, the court has found that Ext.P1 was not issued by the accused for the discharge of a legally enforceable debt towards the complainant. Accordingly, issue No.1 and 3 were found Crl.A.33/2005 ## **:-3-:** against the complainant and in favour of the accused and accordingly, the accused has been acquitted under section 255(1) Cr.P.C. It is the above order of acquittal and findings are challenged in this appeal. 4. I have heard the learned counsel appearing for the appellant as well as the first respondent/accused and also perused the materials available on record. 5. Going by the judgment of the trial court as well as the materials on record, it can be seen that when the complainant was examined as PW.1, he had deposed in terms of the averments contained in the complaint. In the cross examination PW1 has stated that the accused borrowed money from him during the month of June 1999 and he had demanded for the loan 15 days in advance and the amount was given on such demand. It is also stated that the accused came in his residence at Ernakulam north and demanded for the loan. It is also stated that the accused had borrowed money from him during the year 1995 and repaid that amount without any default He had also stated that he had no business in money lending on interest. It is Crl.A.33/2005 ## **:-4-:** categorically stated that out of the said 5 lakhs rupees, three lakhs rupees was obtained out of the real estate business and other two lakhs he has obtained as loan. It is also stated that he had returned from the gulf countries during the year 1992. From that day onwards, he had the business of real estate. It is also stated that the said amount was received by the accused in cash. It is also stated that he had used to keep amount to the tune of Rs. 5 lakhs. As an answer to a question he had deposed that Rs.5 lakhs was in his hands for the last one year. It is also stated that he had raised loan from his uncle by name P.A.Xavier, Pallippuram, Elamakara and he is not an income tax assessee. It is also deposed that he is having account in the Canera bank, Banerji road branch; Federal Bank, Broadway branch and Syndicate bank, Banerji road branch etc. During cross examination he had admitted that there was a case pending against him as M.C131/95 in the Family court which was preferred by his wife for maintenance. He had also admitted his deposition as RW.1 in that case. He admits that there was another case filed by him against one K.P.Joseph, his brother, Crl.A.33/2005 ## **:-5-:** wherein the amount involved is about Rs.5 lakhs. He denied the suggestion that the case was filed against the accused falsely since the accused along with the brother of the complainant Joseph questioned the complainant's illegal alliance with another lady after abandoning the legally wedded wife and children. It is relevant to note during the cross examination a question was asked for and on behalf of the accused that the complainant has filed the complaint by misusing the blank cheque of the accused. To the above question he answered negatively. To another question that there was no consideration for Ext.P1, he said that he was in the gulf countries for 10 years and that he had sufficient funds and paid the amount to the accused. Going by the evidence of the complainant adduced by him through his deposition it can be seen that he had established his case. Though PW.1 was cross examined extensively, nothing has been brought against the allegation contained in the complaint. The only attempt made by the defence is to the effect that the complainant has no source to part with such a huge amount. But the specific case of the complainant is that he was working in the Crl.A.33/2005 ## **:-6-:** gulf countries for about 10 years and after return on winding up his employment in the gulf countries, he had engaged in real estate business and thus he had given account to show his source for paying the amount to the accused. The above account need not be examined meticulously because in the present case, the signed cheque of the accused is in the possession of the complainant and he had presented the same for encashment and he had given a clearcut evidence regarding the transaction entered into between the complainant and accused. As pointed out earlier, the only suggestion that came out from the defence is that the cheque in question was misused by him for the purpose of filing the complaint. No evidence is adduced and no probable and believable case is made out by the accused explaining as to how the cheque in question was happened to be in the hands of the complainant. When going by the averments contained in the complaint and the deposition of PW.1, it can be seen that the complainant has got a specific case regarding the transaction entered into between the complainant and the accused and it is the specific case of the complainant that the cheque in question Crl.A.33/2005 ## **:-7-:** was issued towards the discharge of the said debt. It is also deposed by the complainant that during the year 1995, there was another loan transaction between the complainant and the accused, and in that transaction, the entire amount was paid by the accused. In the above circumstances, the case put forward by the complainant appears to be a genuine one. In the decision in **Krishna Janardhan Bhat v. Dattatraya Hegde** {(2008(1) KLT 425 (SC)}, the Apex Court held that “an accused for discharging the burden of proof placed upon him under a statue 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. Further more, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is `preponderance of probabilities'. Inference of preponderance of probabilities can be drawn not only from the materials brought on Crl.A.33/2005 ## **:-8-:** records by the parties but also by reference to the circumstances upon which he relies. Once the accused is found to discharge his initial burden, it shifts to the complainant”. The facts and circumstances involved in the present case if examined in the background of the above legal position, it can be seen that the accused has not discharged his duty to rebut the presumption. Of course, if there is no source for the complainant to give such a huge amount as loan, of course that is one of the grounds to find out, whether there was consideration and also the alleged transaction. But when the signed cheque belonging to the accused happened to be in the hands of the complainant, it is for the accused to give a proper explanation and to make out a probable case. But in the present case, no attempt is made to discharge the above burden of the accused in a prosecution under section 138 of the N.I.Act. Of course, the mere signature on the cheque is not sufficient to show that there was execution of the cheque and also passing of consideration. But the allegation contained in the complaint and the oral evidence adduced by the complainant are sufficient to hold that there was Crl.A.33/2005 ## **:-9-:** passing of consideration and he had issued the cheque towards the discharge of the debt arose out of such transaction. Of course, apart from the sole point upon which defence tried to have a finding in favour of the accused and against the complainant, viz,. regarding the source, it is for the accused to rebut the presumption by adducing cogent and reasonable explanation. Going by the impugned judgment of the trial court, it appears that the trial court has not considered the above aspects. From the discussion entered into by the trial court, it appears that the court has also carried away with the only point raised by the defence regarding the source of the complainant to part with such a huge amount. Though the complainant has stated that he had several accounts in several banks, no evidence is adduced and it is free for him to adduce evidence regarding those details. The evidence adduced by the defence through DW1 and Exts.D1 and D2 appears to me not helpful for them to discharge his burden in a prosecution under section 138 of the N.I.Act. As stated earlier, the source of the complainant to pay the amount is one of the circumstances to be considered by the court below, but ## Crl.A.33/2005 ## **:-10-:** primarily it is for the accused to give an account as to why Ext.P1 cheque duly signed by him happened to be in the hands of the complainant. They can give a probable and acceptable reason or explanation. It cannot be said that the accused had discharged his burden under section 139 of the N.I.Act. 6. Considering the entire facts and circumstances involved in the case, I am of the view that it will be beneficial to both the parties to adduce evidence before the court below to substantiate their respective contentions and the court below can come into a legal conclusion based upon the materials and evidence that are to be adduced subsequently. 7. In the result, the impugned judgment of the court below is set aside and the matter is remitted back to the same court for fresh disposal in the light of the above discussion and in view of the decision of the Supreme Court reported in **Krishna Janardhan Bhat v. Dattatraya Hegde** (2008(1) KLT 425) and also the decision of the Supreme Court in **Narayana Menon v. State of Kerala** (2006(3) KLT 404). Accordingly the appeal is allowed. Parties are directed Crl.A.33/2005 ## **:-11-:** to appear before the court below on 28.11.2008 on which date, the court is directed to take the complaint on file and proceed with the same and dispose of on merit. There will be no order as to costs. **V.K.MOHANAN, JUDGE.** kvm/-