M.K. Shajahan v. Shafeek (and The State of Kerala)

1 Crl.A. No.1851 of 2011 ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE C.S.DIAS ``` ``` MONDAY, THE 27[TH] DAY OF NOVEMBER 2023 / 6TH AGRAHAYANA, 1945 ``` ``` CRL.A NO. 1851 OF 2011 ``` ``` AGAINST THE ORDER/JUDGMENT CRA 326/2009 OF I ADDITIONAL SESSION COURT KOLLAM, ST NO.50/2009 OF THE COURT OF THE JUDICIAL FIRST CLASS MAGISTRATE-IV, KOLLAM Crl.L.P. 825/2011 OF HIGH COURT OF KERALA ``` ## **`APPELLANT/S:`** ``` M.K.SHAJAHAN, SHAN MANZIL THATTARKONAM PO, KOLLAM. BY ADV SRI.O.V.MANIPRASAD ``` ## **`RESPONDENT/S:`** ``` 1SHAFEEK, S/O.THAJUDEEN SHAMNA MANZIL, T.K.M C PO, KOLLAM PIN 691 005. 2THE STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA. BY ADVS. SRI.S.SUNIL NARAYANAN - R1 SRI.SAJJU.S SMT.SEETHA.S, PUBLIC PROSECUTOR - R2 ``` ``` THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 27.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 2 Crl.A. No.1851 of 2011 **C. S. DIAS, J. ------------------------Crl.A. No.1851 of 2011 ------------------------Dated this the 27[th] day of November, 2023** ## **JUDGMENT** The appeal is filed questioning the legality and correctness of the judgment in Crl.A No.326/2009 of the Court of the First Additional Sessions Judge, Kollam (Appellate Court) holding the first respondent/accused not guilty and acquitting him for the offence under Section 138 of the Negotiable Instruments Act (in short, ‘N.I.Act’) and reversing the judgment in S.T No.50/2009 of the Court of the Judicial First Class Magistrate -IV, Kollam (Trial Court). The appellant was 3 Crl.A. No.1851 of 2011 the complainant and the first respondent was the accused before the Trial Court. For the sake of convenience, the parties are, referred to as per the status before the Trial Court. ## **Brief facts** 2. The case of the complainant was that the accused had borrowed an amount of Rs.2,50,000/- from the complainant and issued Ext P1 cheque in discharge of a legally enforceable debt. The cheque, on presentation to the bank for collection, got dishonoured by Ext P2 memorandum, due to ‘insufficient funds’ in the bank account of the accused. Although the complainant issued Ext.P3 statutory lawyer notice to the accused, he failed to pay the demanded amount. Hence, the accused committed the above offence. 4 Crl.A. No.1851 of 2011 3. The learned Magistrate took cognizance of the offence. The accused pleaded not guilty to the substance of accusation read over to him. In the trial, the complainant was examined as PW1 and Exts. P1 to P5 were marked on his side. The accused denied the incriminating circumstances appearing against him in the evidence in the questioning under Section 313 of the Code of Criminal Procedure(in short, ‘Code’). The accused produced and marked Ext D1 reply notice on his side. ## **Trial Court judgment** 4. The learned Magistrate, after analysing the materials on record, found the accused guilty and convicted him for the offence under Sec.138 of the N.I Act and sentenced to undergo simple imprisonment for a 5 Crl.A. No.1851 of 2011 period of two months and pay a fine of Rs.2,50,000/and in default to undergo simple imprisonment for a further period of two months. If the fine amount was realised, the same to be paid to the complainant as compensation under Sec.357(1) (b) of the Code. 5. Aggrieved by the said judgment, the accused filed Crl.A No.326/2009 before the Appellate Court. ## **Appellate Court judgment** 6. The Appellate Court, after re-appreciating the materials placed on record, by the impugned judgment, found the accused not guilty and consequently acquitted him and thereby set aside the judgment of the Trial Court. 7. It is challenging the judgment of the Appellate Court; the present appeal is filed. 6 Crl.A. No.1851 of 2011 8. Heard; Sri. O.V Maniprasad, the learned counsel appearing for the appellant, Sri.S.Sunil Narayanan, the learned counsel appearing for the first respondent/accused and Smt.S.Seetha, the learned Senior Public Prosecutor appearing for the second respondent/State. 9. The point is whether there is any illegality or error in the judgment passed by the Appellate Court. 10. It is very well settled by a host of precedents that this Court should be slow and circumspect in interfering with an order of acquittal. It is only when the conclusions arrived at by the Trial Court are manifestly erroneous and wrong, this Court should take a contrary view. 7 Crl.A. No.1851 of 2011 11. Recently, in **Rupesh Manger (Thapa ) v. State of Sikkim** [MANU/SC/1014/2023], the Honourable Supreme Court has held that the Appellate Court should reverse an order of acquittal only if it is so perverse and the conclusions are not plausible. Just because another view is possible, on the re-appreciation of evidence, the Appellate Court shall not disturb the findings of acquittal and substitute the findings of the Trial Court to convict the accused. 12. Keeping the above principles in mind, this Court proceeds to decide the appeal. 13. The complainant's case was that, the accused had borrowed an amount of Rs.2,50,000/- from him and in discharge of the said liability, the accused issued Ext.P1 cheque. The cheque, on presentation to the bank, 8 Crl.A. No.1851 of 2011 got dishonoured by Ext.P2 memorandum due to insufficient funds in the bank account of the accused. Despite issuing Ext.P3 statutory lawyer notice, the accused failed to pay the said amount. Hence, the accused committed the above offence. 14. Indisputably, the accused did not let in any oral evidence. He produced Ext D1 reply notice purportedly dated 27.11.2006. However, he did not produce any material to show the date on which the said reply notice was posted. It is come out in evidence that the reply notice was received by the complainant only after the institution of the complaint. In Section 313 questioning and in the cross-examination of the complainant/PW1, the accused set up a defence that he had not executed Ext P1 cheque and the writings on Ext P1 cheque and 9 Crl.A. No.1851 of 2011 the signature were in two different inks. Therefore, the cheque was forged by the complainant. 15. The learned Magistrate, after comparison of the writings and the signature on the cheque, by invoking his powers under Sec.73 of the Indian Evidence Act, concluded that it was the accused who executed the cheque. As the accused had not discharged the reverse onus of proof under Sec.139 of the N.I Act, the accused was found guilty for the offence under Sec.138 of the N.I Act. 16. In the appeal, the learned Sessions Judge concluded that the oral evidence of PW1 was insufficient to prove the execution of the cheque. Since the accused had denied the execution of the cheque and that PW1 was not aware who had written the amount on 10 Crl.A. No.1851 of 2011 the cheque, it is to be presumed that Ext.P1 cheque was not issued towards a legally enforceable debt. Consequently, the impugned judgment was passed. 17. A negotiable instrument, which includes a cheque, carries the presumption of consideration under 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], 11 Crl.A. No.1851 of 2011 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 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 12 Crl.A. No.1851 of 2011 some cases the accused may not need to adduce evidence of his / her own. ## 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 the 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, 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. In **Bir Singh v. Mukesh Kumar** [2019 (1) KHC 774 SC], the Hon'ble Supreme Court has held that, even if a blank cheque leaf, voluntarily signed and 13 Crl.A. No.1851 of 2011 handed over by the accused towards some payment, would attract the presumption under Section 139 of the N.I.Act, unless the accused by some cogent evidence establish that the cheque was not issued towards the legally enforceable debt. It is further observed, it is immaterial if a cheque may be filled up by any other person other than the drawer and the same would not invalidate the cheque. The onus of proof would still be on the accused to prove that the cheque was not issued in discharge of a legally enforceable debt. 21. In the present case, other than for the bald assertion made by the accused in the reply notice (which admittedly was sent after the filing of the complaint), in the cross-examination of PW1 and in Sec.313 14 Crl.A. No.1851 of 2011 questioning there is no material to prove that the cheque was not drawn by the accused. 22. PW1, in its cross-examination has emphatically deposed that the cheque was drawn in his presence by the accused. Once the complainant had proved the five ingredients contemplated under Section 138 of the N.I. Act, then the onus of proof had shifted to the shoulders of the accused. However, the accused had miserably failed to discharge the reverse onus of proof which was casted on his shoulders. Thus, I am of the definite view that the Appellate Court has gone wrong in holding the accused not guilty for the offence under Sec.138 of the N.I.Act. 23. On a comprehensive re-appreciation of the materials placed on record and the law on the point, I 15 Crl.A. No.1851 of 2011 hold that the Appellate Court has gone wrong in acquitting the accused and, therefore, the impugned judgment is liable to be set aside and the judgment of the Trial Court has to be confirmed by convicting the accused. 24. This Court in **Sasikumar v. Ushadevi** [2023 LiveLaw (Ker) 567] has, after referring to the earlier precedents on the point, held that while convicting an accused for offence under Sec.138 of the N.I.Act, the criminal Court should keep in mind the compensatory aspect of the remedy, which should be given priority over the punitive aspect and the same has to be commensurate with the cheque amount and shall not exceed twice the cheque amount. 16 Crl.A. No.1851 of 2011 25. In the above conspectus, I hold that the first respondent/accused is to be sentenced as per the law laid down in the aforecited decision. 26. In the result, (i) The impugned judgment in Crl.A No.326/2009 is set aside. (ii) The conviction of the first respondent/accused in S.T No.50/2009 of the Trial Court is confirmed. (iii) The first respondent/accused is sentenced to undergo imprisonment for a period of one day (till the rising of the Court) and to deposit a compensation of Rs.3,00,000/- before the Trial Court within sixty days from today and in default, to undergo simple imprisonment for a period of six months. 17 Crl.A. No.1851 of 2011 (iv) If the compensation amount is realised, the same shall be paid to the appellant/complainant under Sec.357(3) of the Code. (v) The first respondent/accused is directed to appear before the learned Magistrate on 27.1.2024 to undergo the sentence and pay the compensation amount. (vi) In case of failure of the first respondent/accused to appear before the Trial Court as ordered above, the learned Magistrate shall execute the sentence and recover the compensation amount from the first respondent and also enforce default sentence. (vii) Execution of the sentence as against the first respondent/accused shall stand deferred till 26.1.2024. 18 Crl.A. No.1851 of 2011 (viii) The Registry is directed to forthwith forward a copy of this judgment to the Trial Court, for compliance. sd/- **C.S.DIAS** sks/27.11.23 **JUDGE**