Nishil v. State of Kerala

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE C.S.DIAS`** ``` FRIDAY, THE 10[TH] DAY OF NOVEMBER 2023 / 19TH KARTHIKA, 1945 ``` ``` CRL.A NO. 518 OF 2011 ``` ``` AGAINST THE ORDER/JUDGMENT ST 2341/2005 OF JUDICIAL FIRST CLASS ``` ``` MAGISTRATE COURT,PONNANI Crl.L.P. 459/2011 OF HIGH COURT OF KERALA ``` ## **`APPELLANT/S:`** ``` NISHIL, S/O.ABOOBACKER PIDAVANNOOR.P.O,ULIYATH HOUSE,PIDAVANNOOR.P.O,, NANNAMUKKU,PONNANI TALUK,MALAPPURAM DISTRICT. ``` ``` BY ADV SRI.C.M.MOHAMMED IQUABAL ``` ## **`RESPONDENT/S:`** ``` 1STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR,HIGH COURT OF KERALA,ERNAKULAM. 2REMANI, W/O.KAMALASANAN KANICHUKULANGARA.P.O,CHERTHALA TALUK,, ALAPPUZHA. ``` ## **`OTHER PRESENT:`** ``` Smt Pushpalatha M.K, SENIOR PUBLIC PROSECUTOR ``` ``` THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 10.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 2 Crl.A. No.518 of 2011 **C. S. DIAS, J. ------------------------Crl.A. No.518 of 2011 ------------------------Dated this the 10[th] day of November, 2023** ## **JUDGMENT** The appeal is filed questioning the correctness and legality of the judgment passed by the Court of the Judicial Magistrate of First Class, Ponnani, (Trial Court) in S.T.No.2341/2005, holding the second respondent/accused not guilty for the offence under Section 138 of the Negotiable Instruments Act (for brevity, “N.I.Act”) and consequently acquitting her. The appellant was the complainant and the second respondent was the accused in the above complaint. For convenience, the parties are referred to as per their status before the Trial Court. 3 Crl.A. No.518 of 2011 ## **Factual matrix** 2. The complainant had filed the complaint against the accused on the assertion that, on 12.9.2005, the accused had executed and issued Ext P1 cheque in favour of the complainant in discharge of a legally enforceable debt. The cheque, on presentation to the bank for encashment, got dishonoured by Ext.P2 memorandum due to ‘insufficient funds’ in the bank account of the accused. The complainant issued Ext P4 statutory lawyer notice demanding the cheque amount. Although the accused received the notice, she failed to pay the demanded amount. Hence, the accused committed the above offence. 3. The learned Magistrate took cognizance of the offence. The accused denied the substance of accusation read over to her. In the Trial, the complainant got himself examined as PW1 and marked Exts.P1 to P4(b) in evidence. 4 Crl.A. No.518 of 2011 The accused denied the incriminating circumstances appearing against her in the questioning under Section 313 of the Code of Criminal Procedure ( in short, ‘Code’). The accused examined a witness as DW1. ## **Trial Court Judgment** 4. The learned Magistrate, after appreciating the materials on record, by the impugned judgment, found the accused not guilty for the offence under Sec.138 of the N.I Act, principally on the ground that the complainant had not proved the transaction. 5. Aggrieved by the said judgment; the appeal is filed. 6. Heard; Sri.C.M Mohammed Iquabal, the learned Counsel appearing for the appellant and Smt.M.K Pushpalatha, the learned Public Prosecutor appearing for the first respondent/State. Even though notice has been served on the second respondent, there is no appearance for her. 5 Crl.A. No.518 of 2011 7. Is there any error in the impugned judgment. 8. There is profusion of judicial authority that this Court should be slow and circumspect in interfering with an order of acquittal. It is only when the conclusions arrived at by the Trial Court are manifestly erroneous and wrong, this Court should take a contrary view. 9. Recently, in **Rupesh Manger (Thapa ) v. State of Sikkim** [MANU/SC/1014/2023], the Honourable Supreme Court has held that the Appellate Court should reverse an order of acquittal only if it is so perverse and the conclusions are not plausible. Just because another view is possible, on the re-appreciation of evidence, the Appellate Court shall not disturb the findings of acquittal and substitute the findings to convict the accused. 10. Keeping the above principles in mind, this Court proceeds to decide the appeal. 6 Crl.A. No.518 of 2011 11. The complainant’s case was that the accused had borrowed a sum of Rs.1,00,000/- from him and in discharge of the said liability had issued Ext P1 cheque. The cheque, on presentation to the Bank, got dishonoured by Ext P2 memorandum due to 'insufficient funds’ in the account of the accused. Although Ext.P4 statutory lawyer notice was issued, the accused failed to pay the demanded amount. Hence, she committed the above offence. 12. The complainant got himself examined as PW1 and Exts P1 to P4(b) were marked through him. The accused denied the incriminating circumstances appearing against her in the evidence. In the defence evidence, the accused examined a witness named Prakash.M as DW1 – an alleged friend of the accused’s son Bijoy. DW1 testified that there was a vehicle transaction between Bijoy and Basheer @ Bichu. Towards the balance sale consideration of the vehicle 7 Crl.A. No.518 of 2011 transaction, Basheer demanded Bijoy to give him a cheque of his wife and mother. Accordingly, Bijoy handed over two cheques, i.e., one of his wife and one of his mother/the accused. Bijoy paid the balance sale consideration within the stipulated time period, but Basheer demanded for a further amount of Rs.10,000/- to close the transaction. Since Bijoy refused to pay the demanded amount, Basheer gave the cheque to the complainant, who got the cheque dishonoured and filed the false complaint. The accused does not have any transaction with the complainant and there is no legally enforceable debt payable by her. 13. The learned Magistrate, after finding that the accused had not let in any oral evidence and that DW1 was a hide witness, discredited his testimony as totally untrustworthy. However, the court below, on the finding that the complainant had failed to prove his source of income to 8 Crl.A. No.518 of 2011 pay Rs.1,00,000/- to the accused, that the complainant had acquaintance with Basheer and simply because the accused had admitted the execution of the cheque, the presumption under Sec.139 cannot be drawn, held that Ext P1 was not issued towards a legally enforceable debt. 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”. ## 15. A three-Judge Bench of the Hon’ble Supreme Court ## in **Rangappa vs. Sri.Mohan** [2010 KHC 4325], while dealing 9 Crl.A. No.518 of 2011 ## 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 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. 10 Crl.A. No.518 of 2011 16. Recently, a three-Judge Bench of the Hon’ble Supreme Court in **Kalamani Tex and Anr vs. P. 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 _._ In **Bir Singh and Mukesh Kumar [ 2019 (1) KHC 774 SC]** the Hon’ble Supreme Court has held that even if a signed black cheque is voluntarily presented to a payee, towards some payment and the payee fills up the amount and other particulars, the same does not invalidate the cheque. 11 Crl.A. No.518 of 2011 The onus would be on the accused to prove the cheque was not issued in discharge of a debt or liability by adducing evidence. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, will attract the presumption under Sec.139 of the N.I Act. In the absence of any cogent evidence, it cannot be assumed the cheque was not issued in discharge of a debt. 18. In the instant case, the learned Magistrate has disbelieved the oral testimony of DW1 who was the sterling witness of the accused. Notwithstanding discrediting DW1, the learned Magistrate for the reasons that the complainant failed to prove the source for Rs.1,00,000/-, that the mere execution of the cheque is insufficient to draw the presumption under Sec.139 of the N.I Act, and the complainant knew Basheer, has dismissed the complaint. 19. Going by the law laid down in **Rangappa, Bir Singh** and **Kalamani Tex** (supra), once the complainant 12 Crl.A. No.518 of 2011 discharges the initial onus of proof of proving the five ingredients of the offence, then the onus shifts to the accused. Indisputably, the accused has not issued a reply notice. She also did not examine her son as a witness, who allegedly had the transaction with the accused. Instead, she examined her son’s friend to prove the transaction with Basheer. The said Basheer was also not summoned and confronted. The accused also did not instruct her bank to stop payment of the cheque. Despite the accused failing to discharge the reverse onus, the learned Magistrate dismissed the complaint. 20. An upshot of the above discussion leads me to the irresistible and solitary conclusion that the learned Magistrate has committed an error in dismissing the complaint. Therefore, I allow the appeal and set aside the impugned judgment; and consequentially convict and sentence the second respondent/accused for the offence under Sec.138 of the N.I Act. 13 Crl.A. No.518 of 2011 In the result, (i) The impugned judgment is set aside. (ii) The second respondent/accused in ST No.2341/2005 is convicted for the offence under Sec.138 of the N.I Act. (iii) The second respondent/accused is sentenced to undergo imprisonment for one day (till the rising of Court) and deposit a fine of Rs.1,00,000/- before the Trial Court within thirty days from today and in default to undergo simple imprisonment for six months. (iv) If the fine amount is realised, the same shall be paid as compensation to the appellant/complainant under Sec.357(1) (b) of the Code. 14 Crl.A. No.518 of 2011 (v) The second respondent/accused is directed to appear before the Trial Court on 10.1.2024 to undergo the sentence and pay the fine amount. (vi) In case of failure of the second respondent/accused to appear before the Trial Court as ordered above, the learned Magistrate shall take steps to execute the sentence and also recover the fine amount. (vii) The execution of sentence shall stand deferred till 9.1.2024. (viii) The Registry is directed to forthwith forward a copy of this judgment to the Trial Court for further proceedings. **SD/-** sks/10.11.23 **C.S.DIAS, JUDGE**