High Court of KeralaSingle Judge2013-12-10Disposed of accordingly.

M/S BhagyaChithra Films (P) Ltd v M/S Akin Communications and State of Kerala

Case / Petition Number:Crl.Rev.No.2280 of 2010

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: K. Harilal
Judgment Date: 2013-12-10
Court Decision / Holding: Criminal Revision Petition disposed of: 1st revision petitioner to pay a fine of Rs.5,000; 2nd revision petitioner to undergo simple imprisonment for one day till rising of the court; 2nd revision petitioner to pay Rs.50,000 as compensation within six months under Sec.357(3) Cr.P.C.; appearance before the trial court to suffer substantive sentence by 10/6/2014 with proof of payment; default to result in one month simple imprisonment; the imprisonment for one day to be concurrent with other connected revisions. Six months’ time granted to pay compensation; otherwise imprisonment in default. The court also notes the decisions on compensatory remedy and reiterates the primacy of restitution in NI Act cases. The petition is disposed of accordingly.
Final Disposition: Disposed of accordingly.

Parties to the Case

Appellants / Petitioners

M/S BhagyaChithra Films (P) Ltd
Gopan, Managing Director, M/S BhagyaChithra Films (P) Ltd

Respondents

M/S Akin Communications
State of Kerala

Legal Representation & Advocates

Counsels for Petitioners

• Adv. SMT.GISA SUSAN THOMAS

Counsels for Respondents

• Sri. Philip T. Varghese
• Sri. Thomas T. Varghese
• Sri. Achu Subha Abraham
• Sri. M.F. Mohammed Siyad
• Public Prosecutor Sri. Reji Joseph

Case Synopsis & Summary

This Kerala High Court revision concerns BhagyaChithra Films (P) Ltd and its managing director challenging concurrent convictions under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) and the corresponding sentences in five connected trials arising from dishonour of five cheques issued in 2007. The complainant, a media advertising firm, alleged that the five cheques totaling Rs. 4,61,223.92 were issued in discharge of a debt for advertising services, all of which were dishonoured upon presentation. The trial courts convicted the appellants in five separate proceedings; the appellants challenged in a single revision petition arguing that signed blank cheques were given in the ordinary course of business and that a final settlement of Rs.50,000 discharged the debt, thus vitiating the presumption under NI Act Sections 118(a) and 139. They also argued lack of proof of subsisting liability and questioned the evidence surrounding cheque execution. The High Court, applying established authorities on the NI Act presumption and the nature of the offence, found no perversity in the lower courts’ appreciation and upheld the conviction while exercising discretion to modify the sentence. It directed six months to pay Rs.50,000 as compensation and reduced the imprisonment to one day until rising of the court for the second petitioner. First petitioner’s fine was fixed at Rs.5,000. The decision mirrors the balance between civil restitution and punitive elements, relying on decisions like Rangappa, Kaushalya Devi Massand, Vijayan, Sreenath, and Hiton Dalal. The revision petition is disposed of accordingly.

Provisions of Law Cited

Section 138 of the Negotiable Instruments Act, 1881Section 118(a) of the Negotiable Instruments Act, 1881Section 139 of the Negotiable Instruments Act, 1881Section 357(3) of Cr.P.C.

Legal Doctrines & Maxims

Offence under Section 138 NI Act is almost in the nature of a civil wrong with criminal overtone.
Presumption under Sections 118(a) and 139 NI Act in favour of the payee exists; burden on accused to rebut.
Existence of a legally enforceable debt is part of the presumption under Sec. 138 NI Act.
Restitution/compensation should be practical and realistic in NI Act prosecutions; priority to compensation over punitive measures.
Mere challenge to the cheque's execution does not bar acceptance of reliable complainant testimony (as per cited decisions).

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners argued that they had entrusted signed blank cheques as part of a routine business relationship and had settled Rs.50,000 as full and final settlement. They contended that Ext.P1 cheque was not supported by consideration and thus the assumptions under Sections 118(a) and 139 NI Act could not be applied in favor of the complainant. They argued that there is no subsisting liability and stressed the lack of documentary proof of the original debt. They urged re-appreciation of evidence, limiting the scope of revisional review to perversity. They also emphasized that the substantive sentence imposed is harsh given the six-year gap since the cheque, and sought leniency.

Contentions of Respondents

The respondents maintained that the five cheques were issued in discharge of a legally enforceable debt; the bank dishonour of those cheques led to valid prosecutions under Section 138 NI Act. They argued that presumption under Sections 118(a) and 139 NI Act was properly invoked and that the complainant need not plead subsisting liability in the manner alleged by the petitioners. They urged that the evidence establishing execution and issuance of cheques was credible and that mere defence questioning the cheque’s execution cannot rebut a reliable case. They pressed for maintaining the concurrent findings of conviction and argued for strict sentence to reflect the offence’s gravity.

Cited Precedents (7)

Case Name	Citation	Treatment	Explanation
Devan v. Krishna Menon	2010 (2) KLT 397	Positive	Court accepts Devan v. Krishna Menon to support the proposition that the complainant is not required to plead subsisting liability; the burden is on the accused to rebut presumptions.
M/s. M. M. T. C. Ltd. v. M/s. Medchl Chemicals and Pharma (P) Ltd. and another	AIR 2002 SC 182	Positive	Authority establishing that no subsisting liability need be alleged in the complaint; corroborates the prosecution’s position.
Sreenath v. T. Joyson	2012 (1) KLT 32	Positive	Affirms that a mere challenge to cheque execution does not preclude accepting credible complainant testimony.
Hiton P. Dalal v. Bratindranath Banerjee	(2001) 6 SCC 16 = AIR 2001 SC 3897	Positive	Rejects fanciful or plausible defenses that would negate presumption under Sec.139 NI Act.
Rangappa v. Mohan	(2010) 2 KLT 682 (SC)	Positive	Presumption under Sec.138 includes existence of a legally enforceable debt.
Kaushalya Devi Massand v. Roopkishore	AIR 2011 SC 2566	Positive	Offence under Sec.138 NI Act is civil in nature with criminal overtone; restitution by compensation is appropriate.
Vijayan vs. Baby	2011 (4) KLT 355	Positive	Restitution through compensation should be practical and realistic; reinforce compensation as remedy.

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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 K.HARILAL** **TUESDAY, THE 10TH DAY OF DECEMBER 2013/19TH AGRAHAYANA, 1935** **Crl.Rev.Pet.No. 2280 of 2010 ( )** **---------------------------------** **AGAINST THE JUDGMENT IN CRL.A. 180/2009 of ADDL.SESSIONS COURT (ADHOC)-II, ERNAKULAM DATED 12-11-2009** **AGAINST THE JUDGMENT IN ST 574/2008 of JUDICIAL FIRST CLASS MAGISTRATE-V, ERNAKULAM DATED 06-03-2009** ## **REVISION PETITIONER/APPELLANTS/ACCUSED:** **---------------------------------------** **1. M/S BHAGYACHITHRA FILMS(P)LTD, SREENIVAS, XL/8068, CHITTOOR ROAD, NEAR SUDHEENDRA HOSPITAL, REP. BY ITS MANAGING DIRECTOR, MR. GOPAN.** **2. MR. GOPAN, S/O K.NARAYANAN NAIR, MANAGING DIRECTOR, M/S BHAGYACHITHRA FILMS(P)LTD, SREENIVAS, XL/8068, CHITTOOR ROAD, ERNAKULAM.** **BY ADV. SMT.GISA SUSAN THOMAS** ## **RESPONDENTS/RESPONDENT/COMPLAINANT/STATE:** **-----------------------------------------** **1. M/S AKIN COMMUNICATIONS, HAVING ITS OFFICE AT 39/4561, HIG NO.38, PANAMPILLY NAGAR, KOCHI, REP. BY ITS MANAGING PARTNER POLACHAN MANIANKOT, KOCHI-682 016.** **2. STATE OF KERALA, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **R1 BY ADV. SRI.PHILIP T.VARGHESE R1 BY ADV. SRI.THOMAS T.VARGHESE R1 BY ADV. SMT.ACHU SUBHA ABRAHAM R1 BY ADV. SRI.M.F.MOHAMMOD SIYAD R2 BY PUBLIC PROSECUTOR SRI. REJI JOSEPH** **THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 10-12-2013, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **K. HARILAL, J. -----------------------------------------------------Crl.R.P. No. 2280 of 2010 -----------------------------------------------------Dated this the 10[th] day of December, 2013** ## **ORDER** This Revision Petition is filed challenging the concurrent findings of conviction entered and the sentence imposed on the Revision Petitioners for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the N.I. Act') in Criminal Appeal No.180/09 on the files of the Additional Sessions Judge, (Ad hoc-II), Ernakulam. The above appeal was filed challenging the judgment finding that the Revision Petitioners are guilty of the said offence, passed in S.T.No.574/2008 on the files of the Judicial First Class Magistrate's Court-V, Ernakulam. According to the impugned judgment, the **Crl.R.P. No. 2280 of 2010** -: 2 :- 1[st] Revision Petitioner shall pay a fine of `5,000/- and the 2[nd] revision petitioner is sentenced to undergo imprisonment till rising of the court and to pay a fine of `50,000/- which shall be deposited before the Judicial First Class Magistrate's Court-V, Ernakulam within one month from 12/11/2009 failing which the 2[nd] revision petitioner shall suffer simple imprisonment for three months. The fine amount of `50,000/- will be given to the complainant as compensation under Sec.357(3) of the Cr.P.C. 2. The first respondent/complainant is a partnership firm engaged in the business of media advertisement, design printing etc. The second appellant/second accused is the Managing Director of the first appellant/first accused company. The appellants/accused Nos.1 and 2 have given advertisement of Malayalam movie “Time” in various newspapers through the first respondent/complainant. On these aspects, there is no dispute between the parties. According to the first respondent/complainant, **Crl.R.P. No. 2280 of 2010** -: 3 :- a total sum of Rs.4,61,223.92 became due from the appellants/accused Nos.1 and 2 and five cheques were given by the second appellant/second accused on behalf of the first appellant/first accused in discharge of liability. The five cheques so relied on by the first respondent/complainant are (1) Cheque bearing the No.104792 dated 16.8.2007 for Rs.50,000/-, (2) Cheque bearing the No.104793 dated 23.8.2007 for Rs.50,000/-, (3) Cheque bearing the No.104794 dated 27.8.2007 for Rs.1,00,000/-, (4) cheque bearing the No.104795 dated 31.8.2007 for Rs.1,00,000/- and (5) Cheque bearing the No.104796 dated 3.9.2007 for Rs.1,00,000/- drawn on the State Bank of Travancore, Broadway Branch, Ernakulam. Pursuant to the dishonour of the above five cheques by the drawee bank, the first respondent/complainant lodged five complainants against the appellants/accused Nos.1 and 2 under Sec.138 of the N.I. Act. The five complaints so lodged by the first respondent/ complainant against the appellants/accused Nos.1 and **Crl.R.P. No. 2280 of 2010** -: 4 :- 2 are (1) S.T.No.462/2008, (2) S.T.No.466/2008, (3) S.T.No.467/2008, (4) S.T.No.574/2008 and (5) S.T.No.864/2008 on the files of the Judicial First Class Magistrate's Court-V, Ernakulam. All the above five cases ended in conviction and sentence of the appellants/accused Nos.1 and 2 under Sec.138 of the N.I. Act. Against the conviction and sentence in S.T.No.462/2008, S.T.No.574/2008, S.T. No.467/2008, S.T.No.466/2008 and S.T.No.864/2008, both appellants/accused Nos.1 and 2 preferred Criminal Appeal Nos.179/09, 180/09, 182/09, 183/09 and 118/09 respectively challenging the same. This revision petition is filed challenging the concurrent findings of conviction and modified sentence imposed in Crl. Appeal No.180/09. 3. In defence, the revision petitioners contended that signed blank cheques were entrusted with the 1[st] respondent/complainant by them in the course of business transaction and a sum of `50,000/- was paid finally towards the full and final settlement of the **Crl.R.P. No. 2280 of 2010** -: 5 :- transactions. It is argued by the learned counsel for the revision petitioners that Ext.P1 cheque is not supported by any consideration and the presumption under Secs.118 and 139 of the N.I. Act in favour of the payee of the cheque are not available in favour of the 1[st] respondent/complainant. According to the learned counsel, the non-production of the statement of account is fatal to the case of the 1[st] respondent/complainant. 4. The learned counsel for the Revision Petitioner reiterated the contentions which were raised before the courts below and got rejected concurrently. The learned counsel urged for a re-appreciation of evidence once again, which is not permissible under the revisional jurisdiction unless any kind of perversity is found in the appreciation of evidence. The Revision Petitioner failed to point out any kind of perversity in the appreciation of evidence. Though the revision petitioners contended that the cheque was not supported by any consideration, nothing brought out in **Crl.R.P. No. 2280 of 2010** -: 6 :- evidence to substantiate the said contention. Similarly, the settled legal position is that no burden is cast on the 1[st] respondent/complainant to plead and prove the particulars of the original transaction (Devan v. Krishna Menon - 2010 (2) KLT 397). In M/s. M. M. T. C. Ltd. and another v. M/s. Medchl Chemicals and Pharma (P) Ltd. and another (AIR 2002 SC 182), the Supreme Court held that there is no requirement that the complainant must allege in the complaint that there is a subsisting liability. The burden of proving that there is no subsisting liability on the accused. In Sreenath v. T. Joyson (2012 (1) KLT 32), the Court held that a mere challenge set up by the accused regarding the execution of the cheque itself does not cause any inhibition in the court accepting the testimony of the complainant, if it is found reliable to hold that that there was due execution. In Hiton P. Dalal v. Bratindranath Banerjee (2001 (6) SCC 16 = AIR 2001 SC 3897), the Supreme Court held that mere fanciful defence though plausible, cannot be **Crl.R.P. No. 2280 of 2010** -: 7 :- sufficient to rebut the presumption under Sec.139 of the N.I. Act. In Rangappa v. Mohan [2010 (2) KLT 682 (SC)], the Supreme Court held that a presumption mandated under Sec.138 of the N.I. Act includes existence of a legally enforceable debt. When applying the parameters laid down by the Apex Court and this Court. I find that the revision petitioners have miserably failed to rebut the presumption under Secs.118(a) and 139 of the N.I. Act. The courts below had concurrently found that the complainant/1[st] respondent had successfully discharged initial burden of proving execution and issuance of the cheque; whereas the Revision Petitioner had failed to rebut the presumption under Section 118(a) and 139 of the N.I. Act which stood in favour of the 1[st] respondent. So also, it is found that the debt due to the 1[st] respondent was a legally enforceable debt and Ext.P1 was duly executed and issued in discharge of the said debt. I do not find any kind of illegality or impropriety in the said findings or perversity in appreciation of evidence, **Crl.R.P. No. 2280 of 2010** -: 8 :- from which the above findings had been arrived. Therefore, I am not inclined to re-appreciate entire evidence once again and I confirm the concurrent findings of conviction. 5. The counsel for the Revision Petitioners submits that challenge under this Revision is confined to sentence only. The sentence imposed on the 2[nd] Revision Petitioner is disproportionate with the gravity and nature of the offence. He further submits that the 2[nd] Revision Petitioner is willing to pay the compensation as ordered by the court below; but he is unable to raise the said amount forthwith due to paucity of funds. But he is ready to pay the compensation within six months. 6. The learned counsel for the 1[st] respondent submits that the cheques were issued in the year 2007 in favour of the 1[st] respondent/complainant and the 2[nd] revision petitioner had already availed of sufficient time to pay off the debt amount. So, a short period alone can be given to pay the compensation. **Crl.R.P. No. 2280 of 2010** -: 9 :- 7. Having regard to the above submission also, the 2[nd] revision petitioner is given six months time to pay the compensation. 8. Similarly, the substantive sentence imposed on the revision petitioner is too harsh and excessive. The learned counsel for the revision petitioners prayed for setting aside the sentence of imprisonment also. If the 2[nd] revision petitioner is incarcerated for a period as ordered by the courts below, the entire family will put put in great hardship. 9. The Supreme Court, in the decision in Kaushalya Devi Massand v. Roopkishore (AIR 2011 SC 2566), held that the offence under Section 138 of the N.I. Act is almost in the nature of civil wrong which has been given criminal overtone, and imposition of fine payable as compensation is sufficient to meet the ends of justice. Further, in Vijayan vs. Baby (2011(4) KLT 355), Supreme Court held that the direction to pay the compensation by way of restitution in regard to the loss on account of the dishonour of the cheque should **Crl.R.P. No. 2280 of 2010** -: 10 :- be practical and realistic. So, in a prosecution under Section 138 of the N.I. Act, the compensatory aspect of remedy should be given much priority over punitive aspect. 10. Having regard to the nature and gravity of the offence, in the light of the decisions quoted above and submission made at the Bar, expressing willingness to pay the compensation within six months, I am inclined to grant six months time to pay the compensation. Similarly, the substantive sentence of imprisonment for six months will stand reduced and modified to simple imprisonment for one day till rising of the court. Consequently, this Revision Petition is liable to be disposed of subject to the following terms. i. The 1[st] revision petitioner shall pay a fine of `5,000/-and the 2[nd] Revision Petitioner shall undergo simple imprisonment for one day till rising of the court. ii. The 2[nd] Revision Petitioner shall pay a compensation of `50,000/- (Rupees fifty thousand only) to the 1[st] respondent/complainant as **Crl.R.P. No. 2280 of 2010** -: 11 :- compensation within a period of six months from today under Sec.357(3) of the Cr.P.C.. iii. The 2[nd] Revision Petitioner shall appear before the Trial Court to suffer substantive sentence of simple imprisonment as ordered above on or before 10/6/2014 with sufficient proof to show payment of compensation. The sentence of imprisonment for one day will be concurrent with the sentence imposed in the four other connected revision petitions. iv. In default, the 2[nd] Revision Petitioner shall undergo simple imprisonment for a period of one month. The Criminal Revision Petition is disposed of accordingly. Sd/(K. HARILAL, JUDGE) Nan/ //true copy// P.S. to Judge