M.P. Stanley v. P.V. Sivaraman and State of Kerala

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. D. Rajan
Judgment Date: 2016-01-11
Court Decision / Holding: Appeal dismissed; the judgment of acquittal in CC 85/01 stands; no illegality in the trial court’s order; the complainant’s case not proven beyond reasonable doubt.
Final Disposition: Appeal dismissed; acquittal upheld

Parties to the Case

Appellants / Petitioners

M.P. Stanley

Respondents

P.V. Sivaraman
State of Kerala represented by Public Prosecutor, High Court of Kerala, Ernakulam

Legal Representation & Advocates

Counsels for Petitioners

• Adv. Sri. K.S. Babu

Counsels for Respondents

• Adv. Sri. Lellulal T.G. Thundathil
• Public Prosecutor Smt. Dhanesh Mathew Manjooran

Case Synopsis & Summary

This is a Criminal Appeal (CRL.A.No. 388 of 2004) preferred by the complainant M.P. Stanley challenging the acquittal of the accused in C.C.85/01 of the Judicial First Class Magistrate, Ernakulam, under Section 138 of the Negotiable Instruments Act. The complainant alleged that in discharge of a debt, the accused issued a cheque for Rs. 3,00,000, which was dishonoured on presentation for insufficient funds. After service of a demand notice, the debt remained unpaid, prompting the filing of a complaint. At trial, Exts P1–P8 were admitted by the appellant and Exts D1–D7(c) were marked by the defense; the trial court acquitted the accused. The appellant contends that the cheque was issued in discharge of a debt, that its dishonour triggers legal presumptions under Sections 138 and 139 NI Act, and that the accused failed to discharge the burden of proof after the presumption arose. The respondents argue absence of a proven debt transaction and heightened evidence of the complainant’s sources, including Sayujya Kuries materials, undermining the link to the alleged loan. The High Court affirms the judgment of acquittal, noting that though a presumption under Section 139 is triggered, it is rebuttable; the defense evidence failed to establish payment or a valid debt. The appeal is thus dismissed with the acquittal upheld and no merit found in the challenge.

Provisions of Law Cited

Section 138 of the Negotiable Instruments Act, 1881Section 139 of the Negotiable Instruments Act, 1881

Legal Doctrines & Maxims

Presumption in favour of the holder under Section 139 NI Act is rebuttable
Burden shifts to the accused upon presumption under Section 139 NI Act; the accused must rebut the presumption with evidence of payment or other valid defense

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends that the cheque was issued in discharge of a debt of Rs. 3 lakhs; Exts P1–P8 establish a debt and the dishonour under Section 138; once the bank dishonour triggers a presumption under Section 139, the burden shifts to the accused to prove payment or other defense. The appellant argues that the ledger evidence and testimony suffice to prove the debt or at least cast doubt on the prosecution’s case, and the trial court erred in acquitting without properly evaluating the evidence.

Contentions of Respondents

The respondents argue there is no proven transaction linking the accused to the complainant; the documents and witnesses fail to establish that Ext P1 was issued in discharge of any debt; the ledger extracts and Sayujya Kuries materials do not credibly prove the transaction; thus the presumption cannot be invoked to the extent of convicting without credible proof of debt and payment.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Beena v. Muniappan	AIR 2001 SC 2995	Positive	Cited to support that the presumption under Section 139 NI Act is rebuttable.
Narayana Menon v. State of Kerala	2006 (3) KLT 404 (SC)	Positive	Cited as further authority that the presumption can be rebutted.

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** ## **MONDAY, THE 11TH DAY OF JANUARY 2016/21ST POUSHA, 1937** ## **CRL.A.No. 388 of 2004 ( )** ## **--------------------------** ## **AGAINST THE JUDGMENT IN CC 85/2001 of J.M.F.C.-III(MOBILE), ERNAKULAM** **------------------------** ## **APPELLANT(S)/COMPLAINANT:** **--------------------------------------------** **M.P.STANLEY, S/o. LATE M.L.PRESSY, MUKKATH HOUSE, EDAVANAKKAD, KOCHI TALUK.** **BY ADV. SRI.K.S.BABU** ## **RESPONDENT(S):** **--------------------------** **1. P.V.SIVARAMAN, S/O.VEKAYUDHAN, PUDUKKATTIL HOUSE, MATURE LANE, CHIYYARAM P.O. CHIYYARAN VILLAGE, THRISSUR.** ## **2. STATE OF KERALA REPRESENTED BY PUBLIC** ## **PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **R1 BY ADV. SRI.LELLULAL T.G.THUNDATHIL R2 BY PUBLIC PROSECUTOR SRI. DHANESH MATHEW MANJOORAN** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 11-01-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **STK** ## **P.D. RAJAN, J.** ## **------------------------------Crl.Appeal.388 of 2004 ---------------------------------------------Dated this the 11[th] of January, 2016** ## **JUDGMENT** This appeal is preferred against the judgment of acquittal in C.C.85/01 of the Judicial First Class MagistrateIII, Ernakulam under Section 138 of the Negotiable Instruments Act (hereinafter referred to as ‘N.I. Act’). The complainant's case is that, in discharge of a debt, accused issued a cheque for Rupees Three lakhs to the complainant. When it was presented through South Indian Bank, Ernakulam, it was dishonoured for the reason of funds insufficient. The complainant demanded the due amount by giving a notice in writing. Even after receipt of that notice, there was no repayment. In the circumstance, a complaint was filed in the trial court. 2. During trial, complainant was examined as PW1 and his documents were marked as Exts. P1 to P8. Accused disputed the transaction and contended that, he do not have any transaction with the appellant. He ## **Crl.Appeal.388 of 2004 2** examined DW1 to DW3 and marked Exts.D1 to D7(a) to (c). The trial court acquitted the accused. Being aggrieved by that he preferred this appeal. 3. Heard the counsel appearing for the appellant and the Public Prosecutor. 4. The appellant's case in the trial court is that, first respondent issued Ext.P1 cheque in discharge of a debt of Rupees Three lakhs. When it was presented for encashment through South Indian Bank, Ernakulam, it was dishonoured for the reason of funds insufficient. Ext.P2 is the dishonour memo, Ext.P3 is the intimation, Ext.P4 is the copy of the lawyer notice, Ext.P5 is the postal receipt, Ext.P6 is the acknowledgement card, Ext.P7 is the reply notice and Ext.P8 is the ledger extract of the account of the first respondent. A perusal of Exts.P1 to P8 shows that when Ext.P1 was presented for encashment, there was insufficient fund to honour the cheque. When cheque is dishonoured for the reason stated under Section 138 of the N.I. Act, a presumption can be drawn in favour of the holder of the cheque. ## **Crl.Appeal.388 of 2004 3** 5. According to Section 138 of the Negotiable Instruments Act, where any 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, out of that account, for the discharge in whole or in part of any debt or liability, is returned by the bank, 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. This deemed provision is subject to the statutory condition that 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 makes a demand for payment of such amount by giving a notice in writing to the drawer of the cheque within 30 days of intimation from the bank about dishonour and nonpayment of due amount after receipt of notice by the ## **Crl.Appeal.388 of 2004 4** drawer of the cheque. 6. When complainant proves that the cheque was received for the reasons stated under Section 138 of the N.I. Act, the presumption under Section 139 of the Negotiable Instruments Act starts operating and burden shifts to the accused. 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”. 7. The apex court in **Beena v. Muniappan (AIR 2001 SC 2995) and Narayana Menon v. State of Kerala 2006 (3) KLT 404 (SC),** held that the presumption is rebuttable. The first respondent contended that there was no transaction with the appellant and the present case was falsely foisted against him. For substantiating that contention DW1 to DW3 were examined in the trial court. DW1 is the Director of Sayujya Kuries (P) Ltd., which was constituted in the year 1998. According to DW1, her husband is the Managing ## **Crl.Appeal.388 of 2004 5** Director of the firm and accused had borrowed some amount from the firm and he failed to return the cash, thereby she filed a complaint against the first respondent, which ended in acquittal and Ext.D2 is the certified copy of the judgment. She also stated that her husband preferred another complaint against the accused in a cheque transaction, thereafter DW1 pleaded inability to identify the present complaint. DW2, who is the husband of DW1 stated that he did not know the appellant in this case. During cross-examination of DW2, he admitted that the ledger and index book of Sayujya Kuries is with him and which were produced before Chief Judicial Magistrate, Thrissur and the extract of the ledger page 151 was marked as Ext.D3. The certified copies of the register book of Sauyujya Kuries was marked as Ext.D4 and balance sheet during 1998-99 of Sauyujya Kuries was marked as Ext.D5. DW3 is the Manager of complainant's firm, Unicenter Service Corporation and his evidence shows that during 1.4.97 to 31.03.2000 the firm is maintaining audit balance-sheet, which was marked as ## **Crl.Appeal.388 of 2004 6** Ext.D7. DW3 deposes that complainant has drawn Rs.36,000/- during December and January, as per schedule A in Ext.D7, his salary was Rs.39,000/-. There was a liability of Rs.4,24,892.92 Schedule-A in Ext.7 was entered as Ext.D7(a). Separate drawing of the complainant during the period December-January 1998 was marked as Ext.D7(b). The total liability shown was marked as Ext. D7(c). The total cash received from the company is Rs.36,000/-. The total liability of the firm is Rs.4,24,892.92. This evidence of first respondent shows that the complainant failed to prove the source of income to give such an amount to the first respondent. When accused examined DW1 to DW3 and produced Exts.D1 to D7(c), the burden normally shifts to the complainant for which he has only the oral evidence in that point. When accused discharges his burden and appellant fails to prove that Ext.P1 was issued in discharge of a debt or liability, the accused is entitled to get the benefit of doubt. Appellant failed to produce documentary evidence to show that he has paid Rs.3 ## **Crl.Appeal.388 of 2004 7** lakhs. In the absence of such evidence, trial court rightly acquitted the accused. I find no illegality in the order and there is no merit in this appeal and it is dismissed accordingly. STK Sd/- **P.D. RAJAN, JUDGE //TRUE COPY//** **P.A. TO JUDGE**