Manesh Varghese v. Sainulabudeen and The State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE N.ANIL KUMAR** **TUESDAY, THE 25TH DAY OF JUNE 2019 / 4TH ASHADHA, 1941** **Crl.Appeal No.2136 of 2008** **AGAINST THE JUDGMENT IN CC 188/2007 OF JUDICIAL MAGISTRATE OF FIRST CLASS -III, KOTTARAKARA DATED 03-04-2008** ## **APPELLANT:** **MANESH VARGHESE, THOTTATHIL VEEDU, KOTTADY P.O., POOYAPPALLY VILLAGE, KOTTARAKKARA TALUK, KOLLAM DISTRICT.** **BY ADVS. SRI.K.BABU (VETTAKKALAYIL) SRI.JOHNSON GOMEZ RESPONDENTS:** **1 SAINULABUDEEN, NAFEER MANZIL, PERUPURAM, KARINGANNOOR P.O.,VELINALLOOR VILLAGE, KOTTARAKKARA TALUK.** **2 THE STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA.** **BY ADV.SRI.VINOY VARGHESE KALLUMOOTTILL PUBLIC PROSECUTOR-SRI.E.C.BINEESH** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 21.06.2019, THE COURT ON 25.06.2019 DELIVERED THE FOLLOWING:** Crl.Appeal No.2136/2008 **==> picture [22 x 9] intentionally omitted <==** **CR** ## **JUDGMENT** This instant appeal is directed against judgment dated 3[rd] April, 2008 rendered by the learned Judicial First Class Magistrate-III, Kottarakkara in C.C.No.188/2007 acquitting the accused under Section 138 of the Negotiable Instruments Act, 1881 ('the Act' for short). 2. It is the case of the appellant/complainant (hereinafter referred to as 'complainant') that the respondent/accused (hereinafter referred to as the 'accused') borrowed a sum of Rs.1,25,000/- on 20.3.2006 and issued a cheque drawn on Kollam District Co-operative Bank, Oyoor Branch in the name of the complainant towards repayment of the loan. The complainant presented the said cheque for encashment through Federal Bank, Oyoor Branch. But the cheque was returned unpaid with the endorsement 'funds insufficient'. On 18.5.2006, the complainant issued a legal notice to the accused through his Advocate calling upon the accused to pay the cheque amount. The said notice, sent by Crl.Appeal No.2136/2008 **==> picture [22 x 9] intentionally omitted <==** registered post duly served on the accused. The accused, however did not reply to the notice nor did he pay the cheque amount to the complainant. 3. The complainant filed a criminal complaint under Section 138 of the Act before the court below. Upon consideration of the complaint, the learned Magistrate is prima facie satisfied that a case is made out against the accused. Hence the learned Magistrate took cognizance of the offence under Section 138 of the Act and the case was taken on file as C.C.No.785/2006 of the Judicial First Class Magistrate Court-II, Kottarakkara. Thereafter, the case was transferred to the Judicial First Class Magistrate Court-III, Kottarakkara where the case was renumbered as C.C.No.188/2007. 4. On service of summons, the accused appeared before the trial court. Particulars of the offence were read over and explained to the accused to which the accused pleaded not guilty. Thereafter, the complainant was examined as PW1 and marked Exts.P1 to P6. After the witnesses for the complainant had been examined and before the accused was Crl.Appeal No.2136/2008 **==> picture [22 x 9] intentionally omitted <==** called on for his defence, the accused was questioned under Section 313(1)(b) of Cr.P.C. for the purpose of enabling the accused personally to explain any circumstance appearing in the evidence against him. According to him, he had borrowed a sum of Rs.10,000/- from the father of the complainant. He further contended that the said amount was returned. That apart, he contended that the cheque leaves which were given as security were not returned when the amount was paid back. According to him, he had no account with the Kollam District Co-operative Bank and it was the father of the complainant who introduced him in the said Bank for the purpose of opening an account there. In support of his contentions, he produced his pass book and got it marked as Ext.D1. Copy of account opening form, copy of ledger folio, and copy of cheque book issue register were marked as Exts.D2 to D4 respectively. 5. On appreciation of evidence, the learned Magistrate held that execution of the cheque was admitted by the accused and that it was proved by the complainant that the cheque was dishonoured on account of “insufficient funds”. However, the Crl.Appeal No.2136/2008 **==> picture [22 x 9] intentionally omitted <==** learned Magistrate concluded that the cheques were not issued by the accused for discharge of a debt or liability. The learned Magistrate mainly relied on the oral evidence of PWs1 and 2 and Exts.D1 to D4 and held that the defence pleaded by the accused was more probabilised. DW1 adduced evidence to show that the account with the District Co-operative Bank, Kollam was seen opened on 2.11.2005. Consequently, Ext.D1 pass book was issued. Ext.D4 is the cheque book issue register which would show that two cheque leaves were given to the accused. Ext.D2 account opening form indicates that the accused was introduced by one Babykutty who is the father of the complainant. Yet another witness was examined by the accused as DW2 to show that Rs.10,000/- was borrowed by the accused from the father of the complainant. DW2 stated that after the death of the father of the complainant, Rs.10,000/- was given back to the complainant but the two cheque leaves given as security were not returned. The court below accepted the contention of the accused and acquitted the accused by judgment dated 3.4.2008. Crl.Appeal No.2136/2008 ..6.. 6. I heard the learned counsel for the parties at length, considered the rival contentions and material placed on record. 7. In order to determine the question whether offence punishable under Section 138 of the Act is made out against the accused, it is necessary to examine the Penal provision of Section 138 of the Act and the presumptions to be raised as envisaged by the provisions of Sections 118 and 139 of the Act. Section 118 of the Act provides certain presumptions to be raised laying down some special rules of evidence relating to presumptions. The presumption, therefore, is a matter of principle to infuse credibility to negotiable instruments including cheques and to encourage and promote the use of negotiable instruments in financial transactions. 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. That Crl.Appeal No.2136/2008 **==> picture [22 x 9] intentionally omitted <==** apart, 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 of the Act for the discharge, in whole or in part, of any debt or other 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 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. Needless to say that, as and when the complainant discharges the burden to prove that the cheque was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act are very much available to the complainant and the burden shifts on the accused. However, this presumption is rebuttable. Under the circumstances, it is the duty of the accused before the court by adducing evidence to show that the cheque was not Crl.Appeal No.2136/2008 **==> picture [22 x 9] intentionally omitted <==** supported by consideration and that there was no debt or liability to be discharged as alleged. It is necessary on the part of the accused to set up a probable defence for getting the burden of proof shifted to the complainant. Once such rebuttable evidence is adduced and accepted by the court, the burden shifts back to the complainant. The defence of the accused is that he had no account with the Kollam District Cooperative Bank and that it was the father of the complainant who introduced him in the Bank is not a probable defence to shift the burden to the complainant. The fact that an amount of Rs.10,000/- was borrowed by the accused from the father of the complainant and it was returned is also not a probable defence. The defence evidence would indicate that the accused handed over cheque to the complainant. According to him, even after the payment of Rs.10,000/- the cheque was not returned. Having regard to the materials on record, this Court is of the view that the accused failed to adduce evidence to rebut the presumption or a probable case to shift the burden to the complainant. Crl.Appeal No.2136/2008 **==> picture [22 x 9] intentionally omitted <==** 8. It is well settled law that an appeal against acquittal seeking to set aside the judgment of the trial court, the High Court does not, in the absence of perversity upset factual findings arrived at by the trial court. It is not for the appellate court to re-analyse and re-interpret the evidence on record in a case where the trial court has come to a probable conclusion. On going through the impugned judgment, this Court is of the view that the lower court misconstrued Section 139 of the Act. Unless the contrary is proved, it is presumed that the holder of a cheque received the cheque of the nature referred to in Section 138 of the Act for the discharge, in whole or in part, of any debt or other liability. In the case at hand, the accused has no case that he has not signed the cheque or parted with under any threat or coercion. That apart, the accused has no case that unfilled cheque had been lost irrecoverably or stolen. The accused failed to prove in the trial by leading cogent evidence that there was no debt or liability. In **Bir Singh v. Mukesh Kumar [(2019) 4 SCC 197]** the Supreme Court held that in view of Section 139 of Crl.Appeal No.2136/2008 **==> picture [28 x 9] intentionally omitted <==** the Act read with Section 118 of the Act thereof, the Court has to presume that the cheque has been issued for discharging a debt or liability. Paragraphs 39 and 40 of the above case are relevant in this context and the same is extracted below for convenience of reference:- “ _39. It is not the case of the respondentaccused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent-accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. The second question is also answered in the negative._ _40. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.”_ 9. In view of the above, the trial court patently erred in holding that the burden was on the complainant to prove that he had advanced the loan and the blank cheque was given to him in repayment of the same. The finding of the trial Crl.Appeal No.2136/2008 **==> picture [28 x 9] intentionally omitted <==** court that the case of the complainant is not proved beyond reasonable doubt is perverse for the discussions made herein above. 10. The appeal is allowed. The judgment and order of acquittal dated 3.4.2008 of the trial court is set aside. The accused is convicted and sentenced to pay a fine of Rs.2,00,000/-(Rupees Two lakhs only) taking into consideration of the interest accrued during the pendency of the proceedings as well. The fine amount shall be deposited in the trial court within eight weeks from this date failing which the accused shall undergo rigorous imprisonment for a period of three months. Sd/- **N.ANIL KUMAR, JUDGE** skj CONTINUED AT PAGE No.12 Crl.Appeal No.2136/2008 **==> picture [28 x 9] intentionally omitted <==** Certified that the operative portion of the judgment dated 25.06.2019 in CRA.2136/2008 is corrected by adding the sentence “If the amount is deposited in the trial court or paid directly to the appellant/complainant within the aforesaid period, the same shall be released or paid as compensation to the appellant/complainant.” in the last paragraph after the words “the accused shall undergo rigorous imprisonment for a period of three months” vide order dated 11.07.2019 in CRA.2136/2008. ## Sd/- **DEPUTY REGISTRAR**