N. Nandakumar v. Desabandhu Kuries and Loans (P) Ltd and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE C.S.DIAS** **WEDNESDAY, THE 29[TH] DAY OF NOVEMBER 2023 / 8TH AGRAHAYANA, 1945 CRL.REV.PET NO. 1327 OF 2011** **AGAINST THE JUDGMENT ST 4734/2003 OF JUDICIAL MAGISTRATE OF FIRST** **CLASS -II,THRISSUR** **CRA 764/2008 OF THE SESSIONS COURT, THRISSUR** ## **REVISION PETITIONER/APPELLANT/ACCUSED:** N.NANDAKUMAR, S/O.SANKUNNY NAIR, VETTEKKATTU HOUSE, POONKUNNAM, THRISSUR. BY ADV SRI.P.K.MOHANAN(PALAKKAD) ## **RESPONDENTS/RESPONDENTS/COMPLAINANT & STATE:** 1 M/S DESABANDU KURIES AND LOANS (P) LTD, WESTEND SUPERMARKET BUILDINGS, POONKUNNAM, REPRESENTED BY MANAGER, ANTO PAUL, S/O.PAUL MOOKKEN HOUSE, P.O.MANNUTHY, THRISSUR DISTRICT, PIN – 680 002. 2 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA. BY ADVS. SRI.P.SANTHOSH PODUVAL – R1 SR.P.P SMT.SEETHA.S.- R2 THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 29.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **CRL.REV.PET NO. 1327 2011** **2** ## **ORDER** The revision petitioner calls in question the legality and correctness of the judgment in Crl.A No.763/2008 passed by the Court of Session, Thrissur (Appellete Court), confirming the judgment in ST.4734/2003 passed by the Court of the Judicial First Class Magistrate–II, Thrissur (Trial Court), convicting and sentencing the revision petitioner for the offence under Section 138 of the Negotiable Instruments Act (in short, ‘N.I.Act’). The revision petitioner was the accused and the first respondent was the complainant before the Trial Court. ## The facts in brief: 2. The first respondent had filed the complaint before the Trial Court, alleging that the revision petitioner was a subscriber to five tickets of the fifth day chitty Nos.401, 402, 403, 196 and 200 conducted **CRL.REV.PET NO. 1327 2011** **3** by the first respondent. The revision petitioner had auctioned the chitties and the instalments fell in due. In discharge of his liability, he issued Ext.P1 cheque for Rs.65,136/-. The cheque, on presentation to the bank for collection, got dishonoured by Ext.P3 memo due to ‘insufficiency of funds’ in the bank account of the revision petitioner. Although the first respondent had issued Ext.P4 statutory lawyer notice, the revision petitioner failed to pay the demanded amount. Hence, he committed the offence under Sec.138 of the N.I Act. 3. The learned Magistrate took cognizance of the offence. The revision petitioner denied the substance of accusations read over to him. In the trial, an employee and the Managing Director of the first respondent were examined as PW1 and PW2 and Exts. P1 to P9 were marked in evidence on their side. The revision petitioner denied the incriminating circumstances appearing against him in the **4** ## **CRL.REV.PET NO. 1327 2011** questioning under Sec.313 of the Cr.P.C ( in short 'Code'). The revision petitioner got himself examined as DW1 and marked Exts.D1 and D2 in evidence. ## Trial Court Judgment 4. The Trial Court, after analysing the materials on record, found the revision petitioner guilty and convicted him for the offence under Section 138 of the N.I.Act and sentenced him to undergo simple imprisonment for a period of three months and to pay a compensation of Rs.66,000/- to the first respondent under Section 357 (3) of the Code, and in default to undergo simple imprisonment for a further period of three months. 5. Aggrieved by the said judgment, the revision petitioner preferred Crl.A. No.763/2008 before the Appellate Court. ## Appellate Court Judgment 6. The Appellate Court, after re-appreciating the materials on record, by the impugned judgment, **5** **CRL.REV.PET NO. 1327 2011** confirmed the conviction, but modified the substantive sentence by ordering the revision petitioner to undergo imprisonment for a day (till the rising of the court) and confirmed the compensatory aspect. 7. It is assailing the concurrent findings of the courts below, the revision petition is filed. 8. Heard; Sri. P.K.Mohanan, the learned counsel appearing for the revision petitioner; Sri.Santhosh P.Poduval, the learned counsel appearing for the first respondent and Smt.S.Seetha, the learned Senior Public Prosecutor appearing for the second respondent - State. 9. Is there any illegality, impropriety or irregularity in the judgments of the courts below ? 10. The revisional jurisdiction of this Court under Secs.397 to 401 of the Cr.P.C is well settled in a catena of precedents holding that the power is to be sparingly exercised and in cases of exceptional rarity. The power is more in the nature of a supervisory **CRL.REV.PET NO. 1327 2011** **6** jurisdiction, to correct patent errors, manifest illegality and when there is misreading of records. 11. In **Sanjaysinh Ramrao Chavan vs Dattatray Gulabrao Phalke & Anr** [(2015) 3 SCC 123], the Hon’ble Supreme Court has succinctly laid down the scope and purport of the powers under Secs.397 to 401 of the Cr.P.C. It is apposite to extract the revisional declaration of law, which reads as follows: “14. In the case before us, the learned Magistrate went through the entire records of the case, not limiting to the report filed by the police and has passed a reasoned order holding that it is not a fit case to take cognizance for the purpose of issuing process to the appellant. Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is nonconsideration of any relevant material or there is palpable misreading of records, the Revisional Court is not justified in setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional jurisdiction is to preserve the power in the court to do justice in accordance with the principles of criminal jurisprudence. The revisional power of the court under Sections 397 to 401 CrPC is not to be equated with that **CRL.REV.PET NO. 1327 2011** **7** of an appeal. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the courts may not interfere with decision in exercise of their revisional jurisdiction.” ## Facts of the case 12. The first respondent's case was that, the revision petitioner was a subscriber to five chitties conducted by the first respondent. The revision petitioner had auctioned the chitties and received the kuri amount. However, he failed to pay the instalments on time. In discharge of his liability, he issued Ext.P1 cheque, which on presentation to the Bank, got dishonoured due to insufficiency of funds. Despite issuing Ext.P4 lawyer notice, the revision petitioner failed to pay the demanded amount. 13. Even though the revision petitioner did not send any reply notice, he denied the incriminating **8** **CRL.REV.PET NO. 1327 2011** circumstances appearing against him in the questioning under Sec.313 of the Code. He also let in defence evidence by examining himself as DW1. It was his defence that although he had auctioned five tickets, he repaid the entire amount due to the first respondent. Therefore, there was no legally enforceable debt payable by him to the first respondent as per Ext.P1 cheque. 14. 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”. **CRL.REV.PET NO. 1327 2011** **9** 15. A three-Judge Bench of the Hon’ble Supreme Court in **Rangappa vs. Sri.Mohan** [2010 KHC 4325], 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 **CRL.REV.PET NO. 1327 2011** **10** 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 some cases the accused may not need to adduce evidence of his / her own. 16. Recently, a three-Judge Bench of the Hon’ble Supreme Court in **Kalamani Tex and Anr vs. P.** **CRL.REV.PET NO. 1327 2011** **11** **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).” 17.On an appreciation of the materials placed on record, it can be seen that the first respondent had discharged the initial onus of proof by proving the five ingredients contemplated under Sec.138 of the N.I.Act. Then the onus of proof shifted to the shoulders of the revision petitioner. 18. The revision petitioner's defence was that **CRL.REV.PET NO. 1327 2011** **12** although he had auctioned the five tickets mentioned above, he repaid the entire amount due to the first respondent – kuri company. However, there is absolutely no material on record to substantiate his plea of discharge. Therefore, the revision petitioner has failed to rebut the reverse onus of proof that is casted on him under Sec.139 of the N.I.Act. 19. The courts below, on an appreciation of the materials on record have concluded that Ext.P1 cheque was issued by the revision petitioner in discharge of a legally enforceable debt. I do not find any error, illegality or impropriety in the concurrent findings of the courts below to take a contrary view. Thus, I confirm the concurrent convictions and sentences passed by the courts below. 20. At the said point of time, the learned Counsel appearing for the revision petitioner submitted that pursuant to the interim orders passed by the Appellate Court and this Court, this revision petitioner has **CRL.REV.PET NO. 1327 2011** **13** already remitted half of the cheque amount before the Trial Court. Moreover, he may be granted a breathing time to deposit the balance compensation amount before the Trial Court. Taking into account the fact that the revision petition is of the year 2011 and the execution of the sentence was suspended on 7.6.2011, I find the above submission to be reasonable and justifiable. In the result; - (i) The revision petition is dismissed; (ii) The conviction and sentence passed by the Appellate Court is confirmed. - (iii) The revision petitioner is directed to appear before the Trial Court on 29.1.2024, to undergo the substantive sentence and to pay the balance compensation amount, and failing which to undergo the default sentence; - (iv) Needless to mention, if the revision petitioner has already deposited any amount before the court below, only the balance amount need be deposited; - (v) In case of failure of the revision petitioner to appear before the Trial Court and to pay the compensation amount, the Trial Court shall execute the **CRL.REV.PET NO. 1327 2011** **14** sentence to recover the compensation amount and implement the default sentence; - (vi) The execution of the sentence shall stand deferred till 28.1.2024; - (vii) If the compensation amount is realised, the same shall be released to the first respondent, in accordance with law; - (viii) The Registry is directed to forthwith forward a copy of this order to the Trial Court, for compliance. ma/30.11.2023 **Sd/- C.S.DIAS JUDGE**