K.V. Santosh Kumar v. Swaraj Kuries (P) Ltd and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE C.S.DIAS** **TUESDAY, THE 26[TH] DAY OF SEPTEMBER 2023 / 4TH ASWINA, 1945** **CRL.REV.PET NO. 1663 OF 2011** **AGAINST THE ORDER/JUDGMENT CC 753/2006 OF JUDICIAL MAGISTRATE OF** **FIRST CLASS -I,THRISSUR** **CRA 258/2010 OF ADDITIONAL DISTRICT COURT(ADHOC II), THRISSUR REVISION PETITIONER/S:** K.V.SANTHOSH KUMAR S/O.VASU, KADAVIL HOUSE, PALAKKAL,, PALLISSERY.P.O., THRISSUR DISTRICT. BY ADVS. SRI.P.SANTHOSH (PODUVAL) SMT.R.RAJITHA ## **RESPONDENT/S:** 1 M/S.SWARAJ KURIES (P) LTD SWARAJ CORNER, EASTERN BAZAR,, THRISSUR-1. 2 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR,, HIGH COURT OF KERALA, ERNAKULAM. BY ADVS. SMT.K.S.HASEENA SRI.JIJO PAUL ## **OTHER PRESENT:** SR PP SMT SEETHA S THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 26.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: CRL.REV.PET NO. 1663 OF 2011 2 ## **ORDER** The revision petitioner calls in question the legality and propriety of the judgments of the Court of the Additional Sessions Judge (Fast Track Court No.II – Adhoc), Thrissur (Appellate Court) in Crl.Appeal No.258/2010 and the Court of the Judicial First Class Magistrate-I, Thrissur (Trial Court) in C.C.No.753/2006, convicting and sentencing the revision petitioner for the offence under Section 138 of the Negotiable Instruments Act (in short, “N.I.Act”). The revision petitioner was the accused and the 1[st] respondent was the complainant before the Trial Court. ## The facts in brief: 2. The 1[st] respondent had filed the complaint before the Trial Court stating that the revision petitioner had issued Ext.P1 cheque to the 1[st] respondent, in discharge of a legally enforceable debt. The cheque, on presentation to the bank for collection, was dishonored CRL.REV.PET NO. 1663 OF 2011 3 by Ext.P2 memo. Despite issuing Ext.P4 lawyer notice to the revision petitioner, who has acknowledged the receipt of the same, he has failed to pay the demanded amount. Hence, the revision petitioner has committed the offence under Section 138 of the N.I.Act. ## Trial 3. The revision petitioner pleaded not guilty to the substance of accusation read over to him. In the Trial, the 1[st] respondent had examined its Clerk as DW1 and marked Exts.P1 to P14(b) in evidence. The revision petitioner denied the incriminating circumstances put to him in the questioning under Section 313 of the Cr.P.C. The revision petitioner let in defence evidence as DW1 and Ext.D1 was confronted and marked through him. ## Trial Court Judgment 4. The Trial Court, after analysing the materials on record, convicted the revision petitioner for the offence 4 CRL.REV.PET NO. 1663 OF 2011 under Section 138 of the N.I.Act and sentenced him to undergo simple imprisonment for a period of two months and to pay the 1[st] respondent an amount of Rs.22560/- as compensation, and in default to undergo simple imprisonment for a further period of one month. 5. Aggrieved by the said judgment, the revision petitioner had filed Criminal Appeal No.258/2010 before the Appellate Court. ## Appellate Court judgment 6. The Appellate Court, after re-appreciating the materials on record, by the impugned judgment, confirmed the conviction and the compensation part of the Trial Court; but modified the substantive sentence by directing the revision petitioner to undergo imprisonment till the rising of the Court. 7. It is assailing the concurrent findings in the judgments passed by the courts below, the revision CRL.REV.PET NO. 1663 OF 2011 5 petition is filed. 8. Heard; Sri.Santhosh P.Poduval, the learned Counsel appearing for the revision petitioner, Smt.K.S.Haseena, the learned Counsel appearing for the 1[st] respondent and Smt.Seetha S., the learned Public Prosecutor appearing for the 2[nd] respondent. 9. The learned Counsel appearing for the revision petitioner argued that Ext.P1 cheque was issued as security and the same was made use of by the 1[st] respondent to foist a false case against the revision petitioner. The revision petitioner's defence was that there is nothing to connect him with the transaction with the 1[st] respondent. In fact, it was one Job Varghese, who had bid in the chitty and Ext.P1 cheque was issued as security for the said transaction. 10. The learned Counsel appearing for the 1[st] respondent defended the judgments of the courts below 6 CRL.REV.PET NO. 1663 OF 2011 and submitted that there is no valid ground in the revision petition to set aside the concurrent findings of the courts below. The revision petition is only to be dismissed. 11. Is there any illegality, impropriety or irregularity in the judgments of the courts below. 12. Before I delve into the legality and correctness of the impugned judgments, this Court reminds itself of the scope and purport of the revisional jurisdiction of this Court under Secs.397 to 401 of the Cr.P.C. 13. There is a profusion of precedential authority that the revisional power of this Court is to be sparingly exercised and only in cases of exceptional rarity. The power is more in the nature of a supervisory jurisdiction, to correct patent errors, manifest illegality and when there is total miscarriage of justice. Nonetheless, the revisional power of this Court cannot be equated to CRL.REV.PET NO. 1663 OF 2011 7 Appellate/Second Appellate power. Merely because a different view is possible, the revisional Court shall not substitute the views of the Trial/Appellate Court, unless and until the court below has misread the records and taken a view that is shocking to the conscience of the revisional court. 14. In **Sanjaysinh Ramrao Chavan vs Dattatray Gulabrao Phalke & Anr** [(2015) 3 SCC 123], the Hon’ble Supreme Court has succinctly laid down the scope and purport of the powers under Secs.397 to 401 of the Cr.P.C. It is apposite to extract the revisional declaration of law, which reads as follows: “14. In the case before us, the learned Magistrate went through the entire records of the case, not limiting to the report filed by the police and has passed a reasoned order holding that it is not a fit case to take cognizance for the purpose of issuing process to the appellant. Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is nonconsideration of any relevant material or there is palpable misreading of records, the Revisional Court is not justified in setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional jurisdiction is to preserve the power in the court to do justice in accordance with the principles of criminal CRL.REV.PET NO. 1663 OF 2011 8 jurisprudence. The revisional power of the court under Sections 397 to 401 CrPC is not to be equated with that of an appeal. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the courts may not interfere with decision in exercise of their revisional jurisdiction.” 15. Now, coming back to the facts of the case at hand. 16. The revision petitioner's cardinal contention is that there is no material to prove Ext.P1 cheque was issued towards a legally enforcible debt. Instead, the cheque was issued only as a security for the chitty transaction and the same was mischievously made use of by the 1[st] respondent company. Actually, the chitty was auctioned by one Job Varghese and it was in discharge of the said person's liability, that the 1[st] respondent made use of Ext.P1 cheque. 17. A negotiable instrument, which includes a cheque, carries the presumption of consideration under CRL.REV.PET NO. 1663 OF 2011 9 ## Secs.118(a) and 139 of the N.I Act. It is profitable to extract the said relevant provisions: “118. Presumptions as to negotiable instruments – Until the contrary is proved, the following presumptions shall be made;- (a) of consideration-that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; 139. Presumption in favour of 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”. ## 18. A three-Judge Bench of the Hon’ble Supreme Court in **Rangappa vs. Sri.Mohan** [2010 KHC 4325], while dealing with Sec.139 of the N.I Act has conceptualised the doctrine of ‘reverse onus’, by holding thus: “ 18. In light of these extracts, we are in agreement with the respondent - claimant that the presumption mandated by S.139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the CRL.REV.PET NO. 1663 OF 2011 10 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 favours the complainant. S.139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While S.138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under S.139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by S.138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused / defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under S.139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his / her own. 15. Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the 'stop payment' instructions to his bank. Furthermore, the instructions to 'stop payment' had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under S.138 of CRL.REV.PET NO. 1663 OF 2011 11 the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant - accused was not able to contest the existence of a legally enforceable debt or liability. The fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction – related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction - expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant”. 19. Recently, a three-Judge Bench of the Hon’ble Supreme Court in **Kalamani Tex and Anr vs. P. Balasubramanian** [2021 (2) KHC 517] has reiterated the legal position and doctrine of the reverse onus. It is apposite to extract the relevant paragraphs, which declares the law on the point in the following terms: “14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature (s) of an accused on the cheque/negotiable instrument are established, then these ‘reverse onus’ clauses become operative. In such a situation, the CRL.REV.PET NO. 1663 OF 2011 12 obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystalized by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat (2019 (2) KHC 243).” ## 20. Similarly, in **M/s.Shree Daneshwari Traders vs Sanjay Jain** [2019 (4) KHC 495], the Hon’ble Supreme Court has held as follows: “16. Under Section 138 of the Negotiable Instruments Act, once presumption the cheque under is Section issued 139 by the drawer, a of the Negotiable Instruments Act in favour of the holder would be attracted. Section 139 creates a statutory presumption that a cheque received in the nature referred to under Section 138 of the Negotiable Instruments Act is for the discharge in whole or in part of any debt or other liability. The initial burden lies upon the complainant to prove the circumstances under which the cheque was issued in his favour and that the same was issued in discharge of a legally enforceable debt. 17. It is for the accused to adduce evidence of such facts and circumstances to rebut the presumption that such debt does not exist or that the cheques are not supported by consideration. Considering the scope of the presumption to be raised under Section 139 of the Act and the nature of evidence to be adduced by the accused to rebut the presumption”. ## 21. Indisputably, the revision petitioner has admitted the execution of Ext.P1 cheque. His defence is that the chitty was auctioned by Job Varghese and it was towards the said person's liability that Ext.P1 cheque was presented by the 1[st] respondent and, thereafter, the CRL.REV.PET NO. 1663 OF 2011 13 prosecution was launched. 22. Admittedly, the revision petitioner has not sent any reply notice to Ext.P4 lawyer notice sent by the 1[st] respondent. 23. In **Rangappa** (supra), the Honourable Supreme Court has held that, once a cheque is dishonoured, a reverse onus of proof is cast on accused under Section 139 of the N.I.Act. If the accused fails to reply to the statutory lawyer notice issued under Section 138 of the N.I.Act, then an inference has to be drawn in favour of the complainant. Even if there is a slight discrepancy in the complaint's version, the same cannot dispel the presumption under Section 139 of the N.I.Act. Likewise, in **Kalamani Tex** (supra), the Honourable Supreme Court has held that even if a blank cheque leaf is voluntarily signed and handed over by the accused towards some payment, the statutory presumption under Section 139 of the N.I.Act cannot be obliterated. Moreover, the accused CRL.REV.PET NO. 1663 OF 2011 14 has to praise a probable defense. 24. In the case at hand, the courts below, after adverting to Ext.D1 application submitted by the revision petitioner, wherein he had sought for the transfer of the kuri auctioned by Job Varghese to his name and volunteered to pay the remaining installments to the 1[st] respondent, found that Ext.P1 cheque was issued in discharge of the said liability. 25. On an appreciation of the materials on record and the law laid down by the Honourable Supreme Court, I do not find any error, illegality or impropriety in the concurrent findings of the courts below to take a contrary view that the revision petitioner has not committed an offence under Section 138 of the N.I.Act. Thus, I confirm the concurrent convictions of the courts below and the sentence imposed by the Appellate Court. 26. At the said point of time, the learned Counsel CRL.REV.PET NO. 1663 OF 2011 15 appearing for the revision petitioner prayed that the revision petitioner may be granted two months' time to pay the compensation amount. As the revision petition is of the year 2011 and the fact that this Court had suspended the execution of sentence on 01.07.2011, subject to the condition that the revision petitioner deposits an amount of Rs.11,285/- before the Trial Court from the date of the said order, I find the present submission to be reasonable and justifiable. Hence, I am inclined to accept the said submission. In the result; - (i) The revision petition is dismissed; - (ii) The conviction imposed by the courts below and the sentence imposed by the Appellate Court are confirmed; - (iii) The revision petitioner is directed to appear before the Trial Court on or before 27.11.2023, to undergo the substantive sentence and to the pay CRL.REV.PET NO. 1663 OF 2011 16 compensation amount; - (iv) Needless to mention, if the revision petitioner has already deposited any amount towards the fine amount, as directed by this Court, only the balance amount need be deposited; - (v) In case of failure of the revision petitioner to appear before the Trial Court, to undergo the sentence and to pay the compensation amount as directed above, the Trial Court shall execute the sentence and recover the compensation amount, in accordance with law. - (vi) The execution of the sentence shall stand deferred till 27.11.2023. - (vii) The Registry is directed to forthwith forward a copy of this order to the Trial Court for compliance. Sd/- **C.S.DIAS JUDGE** rkc/26.09.23