High Court of KeralaSingle Judge2015-08-13Partly Allowed

M.S.Anoop v. Jayadasan and State of Kerala

Case / Petition Number:Crl.Rev.Pet.No.1720 of 2007

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. D. Rajan
Judgment Date: 2015-08-13
Court Decision / Holding: The revision petition is partly allowed. The High Court modifies the sentence: the accused is to be imprisoned till rising of the court and to pay Rs. 23,145 as compensation under Section 357(3) Cr.P.C., with simple imprisonment for 3 months in default of payment. The accused is directed to appear before the trial court within 30 days; Non-bailable warrants may issue if he fails to comply. The petition is disposed of accordingly.
Final Disposition: Partly Allowed

Parties to the Case

Appellants / Petitioners

M.S.Anoop

Respondents

Jayadasan
State of Kerala

Legal Representation & Advocates

Counsels for Petitioners

• Sunny Mathew

Counsels for Respondents

• Smt. Sareena George (Public Prosecutor)

Case Synopsis & Summary

This Kerala High Court judgment, rendered by Single Judge P. D. Rajan, arises from a criminal revision petition by the accused, M.S. Anoop, challenging a conviction under Section 138 of the Negotiable Instruments Act. The trial court (Judicial First Class Magistrate, Vadakara) and the appellate court (Additional District & Sessions Court, Vadakara) had held the petitioner guilty of issuing a cheque in discharge of a debt, which was dishonoured for insufficiency of funds, and sentenced him to imprisonment and to pay compensation of Rs. 23,145 under Cr.P.C. The de facto complainant produced a power-of-attorney holder as PW1 along with documents P1–P10 to prove the transaction and notice of dishonour. The defence elicited DW1 and marked Exts.D1–D2, but the courts below were unconvinced that these documents rebutted the statutory presumption under Section 139 NI Act. The High Court explicitly relies on the presumption in favour of the holder under Section 139, which arises once a legally enforceable debt is established, and notes that the presumption is rebuttable; the onus lies on the accused to show nonexistence of debt. Citing Rangappa v. Sri Mohan, Hiten P. Dalal, and Narayana Menon, the court holds that mere marking of defence documents is insufficient to rebut the presumption. The revision is partly allowed: the sentence is modified to imprisonment till rising of the court and payment of Rs.23,145 as compensation, with NBW provisions if required. The petition is disposed of accordingly.

Provisions of Law Cited

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

Legal Doctrines & Maxims

Presumption in favour of the holder under Section 139 NI Act; such presumption is rebuttable.
Burden shifts to the accused to adduce evidence showing nonexistence of the presumed facts.

Submissions & Arguments

Contentions of Appellants / Petitioners

The revision petitioner contends that the defence evidence (DW1 and Exts.D1–D2) creates a reasonable possibility that there was no legally enforceable debt or liability. It is argued that under Section 139 NI Act the presumption in favour of the holder is rebuttable, necessitating credible proof of nonexistence of the debt. The defence asserts the trial court and appellate court erred by treating Exts.D1–D2 as neutral or insufficient to rebut the presumption, thereby upholding conviction. Relying on Rangappa v. Sri Mohan, Hiten P. Dalal, and Narayana Menon, the petitioner argues that mere marking of the defence documents cannot substitute for direct evidence negating the debt, and that the standard for rebuttal requires a credible possibility that the debt did not exist. The revision petition therefore seeks to set aside the conviction or reduce the sentence, emphasizing that proper appraisal of the defence evidence was not undertaken.

Contentions of Respondents

The respondents argue that Ext.P2 cheque was issued for discharge of a legally enforceable debt and that a notice of dishonor was issued within the statutory period. They rely on the Section 139 NI Act presumption in favour of the holder and on the documentary proofs (P1–P10) and the dishonour memo to establish liability. The argument stresses that the burden shifted to the accused to rebut the presumption, which he failed to do credibly. Citing Rangappa, Hiten Dalal, Narayana Menon, the respondents contend that the revision court correctly recognized the presumption and that the accused did not present credible evidence to negate the debt; hence, the conviction and sentence should be upheld or properly modified only in line with statutory guidelines.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Rangappa v. Sri Mohan	2010 (11) SCC 441	Positive	Used to establish that Section 139 NI Act creates a presumption of debt and liability which is rebuttable; it underscores an initial presumption in favour of the complainant.
Hiten P. Dalal v. Bratindranath Banerjee	(2001) 6 SCC 16	Positive	Cited to support the principle that rebutting the presumption requires evidence suggesting nonexistence of the debt; mere production of documents is not sufficient.
Narayana Menon v. State of Kerala	(2006) 3 KLT 404	Positive	Followed to affirm that the accused must adduce credible evidence to rebut the presumption under Section 139; reinforces the standard set by Hiten Dalal.

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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** ## **THURSDAY, THE 13TH DAY OF AUGUST 2015/22ND SRAVANA, 1937** ## **Crl.Rev.Pet.No. 1720 of 2007 ( )** **---------------------------------** ## **AGAINST THE JUDGMENT IN CRA 431/2006 of ADDL.DISTRICT & SESSIONS COURT, VADAKARA** ## **AGAINST THE JUDGMENT IN CC 178/2003 of J.M.F.C.,VADAKARA** ## **--------------** ## **REVISION PETITIONER(S)/APPELLANT/ACCUSED NO.1:** **--------------------------------------------------------------------------------** **M.S.ANOOP, S/O.SUKUMARAN, VEENUS HOUSE, MOORIYADU CHALAPPURAM PO, KOZHIKODE.** ## **BY ADV. SRI.SUNNY MATHEW** ## **RESPONDENT(S)/COMPLAINANT AND STATE:** **-----------------------------------------------------------------** ## **1. JAYADASAN, S/O.NARAYANAN T.,** - **MANAGING DIRECTOR OF M/S.AQUILA FINANCE PVT. LTD., VADAKARA, REPRESENTED BY THE POWER OF ATTORNEY, HOLDER AND MANAGER K.T. RAMESHAN, KADAYAMTHOTTATHIL, HOUSE, VADAKARA AMSOM.** ## **2. STATE OF KERALA,** **REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **R2 BY PUBLIC PROSECUTOR SMT.SAREENA GEORGE** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 1308-2015, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **STK** ## **P.D. RAJAN, J. ------------------------------Crl. R. P. No.1720 of 2007 ---------------------------------------------Dated this the 13[th] day of August, 2015** ## **ORDER** The revision petitioner is the first appellant in Crl. Appeal 431/2006 on the file of the Additional Sessions Judge Vadakara challenges the judgment of conviction under Section 138 of Negotiable Instruments Act (hereinafter referred to as the 'Act'). He was accused in CC178/2003 of the Judicial First Class Magistrate, Vadakara and convicted under Section 138 of the Act, sentenced to imprisonment for 3 months and to pay compensation of Rs.23145/- under Section 357(3) Cr.P.C. in default of payment of compensation, simple imprisonment for one month. The revision petitioner is the first accused and first respondent is the de-facto complainant in the trial court. 2. The brief facts necessary for the indictment were that the revision petitioner gave Ext.P2 cheque to the first respondent in discharge of a debt. When it was presented for encashment, it was dishonoured for the reason of ## **Crl. R. P. No.1720 of 2007 2** funds insufficient. He demanded the amount by giving a notice in writing to the first respondent. Even after that, there was no repayment. In such a situation, the above complaint was filed in the trial court. To prove the offence, Power of Attorney holder of the de-facto complainant was examined as PW1 and his documents were marked as P1 to P10. The incriminating circumstance brought out in evidence were denied by the revision petitioner while questioning him. He examined DW1 and marked Ext.D1 and D2. The trial court after analyzing the oral and documentary evidence, convicted the revision petitioner. 3. After filing this revision, this court directed the revision petitioner to take steps against the first respondent. Thereafter, no response was there from the side of the revision petitioner. In this circumstance, I have perused the documents. 4. According to Section 138 of the Negotiable Instruments Act, where any cheque drawn by a person on ## **Crl. R. P. No.1720 of 2007 3** 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. 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 the statutory period on the date of receipt of information from the bank regarding the return of the cheque as unpaid. 5. PW1 is the Power of Attorney holder and Ext.P1 is the copy of the Power of Attorney. He deposed that he ## **Crl. R. P. No.1720 of 2007 4** has direct knowledge about the transaction. When Ext.P2 cheque was presented for encashment it was dishonoured for the reason of funds insufficient. Ext.P3 is the dishonour memo. Ext.P4 is the intimation of dishonour from bank. Ext.P5 is the copy of lawyer notice. Ext.P6 is the postal receipt. Ext.P8 and Ext.P9 are acknowledgement cards. Ext.P10 is the hire purchase agreement. When cheque was dishonoured for the reason 'funds insufficient’ a presumption under Section 139 shall be drawn in favour of the holder of the cheque. 6. Section 139 of the Negotiable Instruments Act 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”. When complainant proves the existence of a legally enforceable debt, the presumption under Section 139 of the Negotiable Instruments Act starts operating and ## **Crl. R. P. No.1720 of 2007 5** burden shifts to the accused. A three Judge bench of the Apex Court in **Rangappa V. Sri Mohan (2010(11) SCC 441)** held as follows:- “The presumption mandated by Section 139 includes a presumption and 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 lliability can be contested. However, there can be no doubt that there is an initial presumption which favours the respondent complainant”. Therefore, in the present case since the cheque as well as the signature has been accepted by the accused, the presumption under Section 139 would operate. Thus, the burden was on the accused to rebut the presumption. The apex court in **Hiten P. Dalal v. Bratindranath Banerjee ((2001) 6 SCC 16)** followed in **Narayana Menon V. State of Kerala (2006 (3) KLT 404)** held that, rebutting the presumption in 139 of the Negotiable Instruments Act accused has to adduce ## **Crl. R. P. No.1720 of 2007 6** some evidence showing the reasonable possibility of nonexistence of presumed facts. 7. The revision petitioner examined DW1 to rebut the presumption under Section 139 of the Negotiable Instruments Act. He marked Ext.D1 series and Ext.D2. Even though such documents were marked, that itself is not sufficient to rebut the presumption. In this circumstance, the learned Magistrate came to the conclusion that Ext.P2 was dishonoured for the reason of funds insufficient. The appellate court also confirmed the findings and upheld the conclusion reached by the trial court. I find, no illegality in the above judgments and I modify the sentence of the appellant and he is sentenced to an imprisonment till rising of the court and to pay a sum of Rs.23145/- to the first respondent under Section 357(3) Cr.P.C. as compensation, in default of payment of compensation, simple imprisonment for 3 months. The revision petitioner is directed to appear before trial court within 30 days from today, failing which, **Crl. R. P. No.1720 of 2007 7** Judicial First Class Magistrate, Vadakara shall issue Nonbailable Warrant against the accused. This Revision Petition is partly allowed and disposed of accordingly. STK Sd/- **P.D. RAJAN, JUDGE** //TRUE COPY// P.A. TO JUDGE