High Court of KeralaSingle Judge2015-12-23Partly Allowed: Conviction upheld; sentence mod...

M.K. Surendran v. C.M. Shaji

Case / Petition Number:Crl.R.P. No. 1794 of 2012

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. D. Rajan
Judgment Date: 2015-12-23
Court Decision / Holding: The revision petition is partly allowed in the sense that the sentence is modified. The conviction under Section 138 NI Act is upheld, with the trial court’s sentence replaced by imprisonment till the rising of the Court and an order to pay ₹85,000 as compensation under Section 357(3) Cr.P.C. The petitioner is directed to surrender to the trial Court to undergo the modified sentence; any amount deposited shall be adjusted against the compensation.
Final Disposition: Partly Allowed: Conviction upheld; sentence modified to imprisonment till rising of the Court with payment of ₹85,000 as compensation; petitioner to surrender for modified sentence; deposits adjusted against compensation.

Parties to the Case

Appellants / Petitioners

M.K. Surendran S/o M.T. Kunhambu

Respondents

C.M. Shaji S/o M. Vas u
State of Kerala represented by the Public Prosecutor, High Court of Kerala, Ernakulam

Legal Representation & Advocates

Counsels for Petitioners

• Sri. K.C. Santhoshkumar
• Smt. K.K. Chandralekha

Counsels for Respondents

• Sri.C.P. Peethambaran
• Public Prosecutor, Smt. N. Suresh (as appropriate)

Case Synopsis & Summary

This is a criminal revision petition under Section 397/401, challenging the conviction of M.K. Surendran for an offence punishable under Section 138 of the Negotiable Instruments Act. The facts: the accused issued a cheque for ₹77,000 in discharge of a debt; the cheque was dishonoured due to insufficient funds; after a demand notice was served and payment not made, the complainant approached the courts. The Trial Court convicted, and the Appellate Court (Additional Sessions Court, Thalassery) dismissed the appeal, maintaining the conviction and sentence. The revision contends that the presumption in favour of the holder under Section 139 NI Act is rebuttable and that Ext.D1 (DW1) undermines the prosecution’s claim, which should have led to acquittal. The petitioner relies on Beena v. Muniappan and Rangappa v. Sri Mohan to argue that the presumption is not conclusive and must be rebutted with cogent evidence. The court analyzes the record, confirming the presumption in favour of the complainant but notes that the evidence presented did not rebut it sufficiently in the trial to alter the outcome. In light of authorities including Target Overseas Exports Pvt. Ltd. v. A.M. Iqbal, the court, while upholding the conviction, modifies the sentence, directing imprisonment till rising of the Court and a compensation of ₹85,000 under Section 357(3) Cr.P.C. The petitioner is to surrender to the trial Court to serve the modified sentence, with any deposited amount adjusted against the compensation.

Provisions of Law Cited

Section 138, Negotiable Instruments ActSection 139, Negotiable Instruments ActSection 357(3), Cr.P.C.

Legal Doctrines & Maxims

Rebuttable presumption under Section 139 NI Act in favour of the holder
Existence of a legally enforceable debt or liability (as per presumption under Section 139)
Beena v. Muniappan principle
Rangappa v. Sri Mohan principle
Ends of justice in sentencing (as guided by Target Overseas Exports Pvt. Ltd. v. A.M. Iqbal)

Submissions & Arguments

Contentions of Appellants / Petitioners

The revision petitions contends that the Section 139 presumption is rebuttable and that Ext.D1(s) and DW1 do not establish a legally enforceable debt; mere issuance of a cheque in discharge of a debt cannot override the necessity of proving the debt itself; the evidence suggests that the debt may not be established beyond reasonable doubt, and therefore conviction should be reassessed; the sentence should reflect the ends of justice given the nature of the transaction and the relatively small amount, invoking Beena v. Muniappan and Rangappa v. Sri Mohan to emphasise the presumption is rebuttable and not sacrosanct; the revision seeks acquittal or at least a lenient sentence.

Contentions of Respondents

The respondents argue that the record, including Ext.P1, the dishonour memo, and the notice, demonstrates a debt or liability; the presumption under Section 139 is a strong but rebuttable presumption; the trial and appellate Courts rightly held that the presumption was not rebutted by the defence; the sentence of imprisonment till rising of the Court with compensation aligns with the ends of justice and is supported by Beena, Rangappa, and Target Overseas Exports decisions as guiding precedents.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Beena v. Muniappan	AIR 2001 SC 2995	Positive	Cited to illustrate the rebuttable nature of the presumption under Section 139 and the need to prove debt/liability; supports the principle that there is an initial presumption in favour of the complainant.
Rangappa v. Sri Mohan	(2010) 11 SCC 441	Positive	Cited for the proposition that Section 139 presumption exists and can be rebutted; reinforces the need to provide cogent evidence to rebut the presumption.
M/s.Target Overseas Exports Pvt. Ltd. v. A.M. Iqbal	2005 Cri.L.J.1931	Positive	Cited to justify the practice of sentencing in line with ends of justice, guiding the modification of sentence in this case.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE P.D.RAJAN** **WEDNESDAY, THE 23RD DAY OF DECEMBER 2015/2ND POUSHA, 1937** **Crl.Rev.Pet.No. 1794 of 2012 ()** **-------------------------------AGAINST THE JUDGMENT IN Crl.Appeal 729/2004 of ADDITIONAL SESSESIONS COURT (ADHOC-1), THALASSERY DATED 26-04-2012** **AGAINST THE JUDGMENT IN S.T 2036/2004 of CHIEF JUDICIAL MAGISTRATE, THALASSERY DATED 08-11-2004** **REVISION PETITIONER(S)/APPELLANT/ACCUSED:** **-----------------------------------------M.K.SURENDRAN S/O.M.T.KUNHAMBU, M.K.HOUSE, CHALA 12TH KANDY, THOTTADA P.O., KANNUR DISTRICT.** **BY ADVS.SRI.K.C.SANTHOSHKUMAR SMT.K.K.CHANDRALEKHA** **RESPONDENT(S)/RESPONDENT/COMPLAINANT :** **----------------------------------------** **1. C.M.SHAJI S/O.M.VASU, REENA NIVAS, PALAYAD P.O. THALASSERY, KANNUR DISTRICT.** **2. STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR HIGH COURT OF KERALA, ERNAKULAM.** **R1 BY ADV. SRI.C.P.PEETHAMBARAN** **R BY PUBLIC PROSECUTOR SRI. N. SURESH.** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 23-12-2015, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **acd** ## **P.D. RAJAN, J.** ------------------------------------------Crl.R.P.No.1794 of 2012 ---------------------------------------------Dated this the 23[rd] day of December, 2015 ## **ORDER** This revision petition is preferred against the judgment in Crl. Appeal No.729/2004 of the Additional Sessions Judge, Thalassery. The revision petitioner is the accused in S.T.C.No.2036/2004 on the file of Additional Chief Judicial Magistrate, Thalassery for having committed an offence punishable u/s.138 of the Negotiable Instruments Act (hereinafter referred to as the N.I. Act). The complainant's case is that the accused borrowed a sum of 77,000/- from₹ him and in discharge of that debt, he issued Ext.P1 cheque. When it was presented for encashment, it was dishonoured for the reason of funds insufficient. The complainant Crl.R.P.No.1794/2012 2 demanded the amount by giving a notice in writing. Thereafter, there was no repayment. Hence, the above complaint. During trial, the complainant was examined as PW1 and his documents were marked as Exts.P1 to P7. The accused examined DW1 and marked Ext.D1. The learned Additional Chief Judicial Magistrate convicted the accused and sentenced to simple imprisonment for nine months and to pay compensation of 85,000/- u/s.357(3)₹ Cr.P.C. Against that, he preferred Crl.Appeal 729/2004 before Additional Sessions Court, Thalassery and the appeal was dismissed. Being aggrieved by that, he preferred this revision petition. 2. Heard both sides. Section 138 of the N.I. Act, says that where a cheque drawn by a person on an account maintained by him with a bank for payment of any amount of money to another person from that account, for the Crl.R.P.No.1794/2012 3 discharge of any debt or liability, is returned by the bank on the ground that either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with a bank, such person shall be deemed to have committed an offence under Section 138 of the Negotiable Instruments Act. For attracting this deemed provision, the cheque has to be presented within the statutory period in which it is drawn or within the period of its validity. Secondly, the payee or holder in due course of the cheque has to make a demand for payment of such amount by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of information from the bank. If the drawer fails to make the payment of the due amount after receipt of notice, then only the complainant can be proceeded against Crl.R.P.No.1794/2012 4 the accused as per law. 3. The complainant was examined as PW1 in the trial Court and his evidence shows that Ext.P1 was issued in discharge of a debt. When it was presented for encashment, it was dishonoured for the reason of funds insufficient. Ext.P2 is the dishonour memo. Ext.P3 is the memo issued by Dharmadam Service Co-operative Bank, Palayad. Ext.P4 is the copy of lawyer notice. Ext.P5 is the postal receipt. Ext.P6 is the acknowledgment card and Ext.P7 is the reply notice. A close scrutiny of Exts.P1 to P7 shows that when Ext.P1 was presented for encashment, it was dishonoured for the reason of funds insufficient and there was no repayment of the amount after receipt of notice. When cheque is dishonoured for the reason stated u/s.138 of the N.I. Act, a statutory presumption u/s.139 of the N.I. Act can be drawn in favour of the holder of the Crl.R.P.No.1794/2012 5 ## cheque. ## 4. Section 139 reads as follows. “139. Presumption in favour of the 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”. The presumption u/s.139 is a rebuttable presumption. To rebut the presumption u/s.139, the revision petitioner examined DW1 and marked Ext.D1. After analysing the evidence, the trial Court was of the view that, that evidence itself is not sufficient to rebut the presumption u/s.139 of the N.I.Act. The principle drawing presumptions has been explained by the Apex Court in **Beena** v. **Muniappan** (AIR 2001 SC 2995) and in **Rangappa** v. **SriMohan** [(2010) 11 SCC 441], in which it is held as follows: The presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. 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 Crl.R.P.No.1794/2012 6 liability can be contested. However, there can be no doubt that there is an initial presumption which favour the respondent complainant” 5. Considering the legal principle settled by the Apex Court, the trial Court convicted the appellant and the appellate Court rightly confirmed the conviction. Both Courts observed that presumption u/s.139 was not rebutted in this case. Therefore, the conviction passed by the trial Court and confirmed by the appellate Court is upheld. 6. In v. **M/s.Target Overseas Exports Pvt. Ltd. A.M. Iqbal (2005 Cri.L.J.1931)** this Court held that, sentence to undergo imprisonment till the rising of the court and compensation under Section 357(3) Cr.P.C. is sufficient to meet the ends of justice. Considering the nature of transaction, I am of the view that the sentence imposed by the trial court can be modified as follows: Crl.R.P.No.1794/2012 7 The revision petitioner is sentenced to imprisonment till rising of the Court and to pay compensation of ₹ 85,000/- u/s.357(3) Cr.P.C. The revision petitioner is directed to surrender in the trial Court to undergo the modified sentence, failing which the learned Additional Chief Judicial Magistrate, Thalassery shall issue non bailable warrant against the revision petitioner to undergo the modified sentence. Any amount deposited by the revision petitioner shall be adjusted with the compensation amount. **P.D. RAJAN, JUDGE.** acd Crl.R.P.No.1794/2012 8 Crl.R.P.No.1794/2012 9