N.P. Balakrishnan v. P. Girish and State of Kerala

# IN THE HIGH COURT OF KERALA AT ERNAKULAM ## PRESENT THE HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A. WEDNESDAY, THE 12[TH] DAY OF JANUARY 2022 / 22ND POUSHA, 1943 ## CRL.A NO. 948 OF 2015 [AGAINST THE JUDGMENT DATED 23.7.2013 IN C.C.NO.820/2011 ON THE FILE OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT-1, KOZHIKODE] Crl.L.P. 314/2015 OF HIGH COURT OF KERALA ## APPELLANT/COMPLAINANT: N.P.BALAKRISHNAN S/O V.IMBICHAN, "HARSHAM", C/O VIJAY, NEAR GOVERNMENT GUEST HOUSE, P.O.WEST HILL, KOZHIKODE - 673 005. BY ADVS SRI.KALEESWARAM RAJ SRI. THULASI K. RAJ ## RESPONDENTS/ACCUSED & STATE: 1 P.GIRISH S/O KUNHIKADUNGOM, UNNIALINGAL HOUSE, P.O.FEROKE COLLEGE, KOZHIKODE - 673 004. 2 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM BY ADV. R1 BY SRI.VINOD MADHAVAN THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 16.12.2021, THE COURT ON 12.01.2022 DELIVERED THE FOLLOWING: CRL.Appeal No. 948 of 2015 2 ## JUDGMENT This is an appeal submitted by the complainant in C.C.No.820 of 2011 challenging the finding of acquittal by the trial court. The aforesaid complaint was submitted by the appellant herein against the 1[st] respondent alleging offence punishable under section 138 of the Negotiable Instruments Act. 2. The gist of the complaint is as follows: The appellant/complainant was working in the FCI office, West Hill and he has retired from the service recently. The appellant and the 1[st] respondent were colleagues in FCI office West Hill for a long time and later the 1[st] respondent got transferred to Meenangadi in Wayanad district. While they were working in FCI West Hill office, the 1[st] respondent promised to arrange a job for the son of the appellant in a private bank and for which he demanded an amount of Rs.6 lakhs towards deposit and expenses required for ensuring the CRL.Appeal No. 948 of 2015 3 employment. Towards part payment of the same, the appellant paid an amount of Rs.3.5 lakhs and agreeing to pay the balance amount at a later point of time. However, the 1[st] respondent could not arrange the employment as offered and hence the 1[st] respondent had agreed to repay the amount which he collected from the appellant. Towards part payment of the said amount, Rs.2 lakhs was paid in the year, 2008 by keeping a balance amount of Rs.1.5 lakhs. It was pointed out that the appellant had arranged an amount of Rs.3.5 lakhs by borrowing the said amount from his sister-in-law’s fixed deposit in the co-operative bank for which he had to pay the monthly interest at the rate of Rs.4,000/-. Later, the appellant was compelled to discharge the liability of the sister-in-law by raising loan from others by paying high interest. In such circumstances, the 1[st] respondent being aware of the manner in which the appellant raised the funds to pay an amount of Rs.3.5 lakhs, the 1[st] respondent agreed to repay an CRL.Appeal No. 948 of 2015 4 amount of Rs.3 lakhs, apart from Rs.2 lakhs already given to the appellant, towards final settlement (Rs.1.5 lakhs towards the balance amount existing in the actual liability and the remaining Rs.1.5 lakhs towards compensation for the additional expenses incurred by the appellant in raising the amount). Later, on 15.6.2011, a cheque was issued by the 1[st] respondent for an amount of Rs.3 lakhs. However, upon presentation of the same for collection through his banker, the said cheque was returned unpaid for the reason that the payment stopped by the drawer. Accordingly, on 27.6.2011, the appellant issued statutory notice calling upon the 1[st] respondent to pay the amount within 15 days. However, the 1[st] respondent neither paid any amount nor sent any reply. The complaint was submitted in the above circumstances. 3. In support of the case of the appellant, he himself got examined as PW1 and Exhibits P1 to P6 were marked. After closure of prosecution evidence, 1[st] CRL.Appeal No. 948 of 2015 5 respondent was examined under Section 313 of the Cr.PC and he submitted a written statement as contemplated under section 313(5) of the Cr.PC wherein the 1[st] respondent denied the execution of any cheque in favour of the appellant. Thereafter, the 1[st] respondent examined as DW1 and Ext.C1 and C2 were marked in his defence. 4. After considering all the materials on record, the learned Magistrate arrived at a finding that the 1[st] respondent is not guilty and accordingly, he was acquitted under Section 255(1) of the Cr.PC. This appeal is filed in the above circumstances. 5. Heard Sri. Thulasi K.Raj, the learned counsel for the appellant and Sri. Vinod Madhavan, the learned counsel for the 1[st] respondent. 6. The learned counsel for the appellant contends that, the cheque issued by the accused carries presumption both under sections 118 and 139 of the Negotiable Instruments Act. Unless the 1[st] respondent CRL.Appeal No. 948 of 2015 6 adduces evidence to rebut the said presumption, it has to be found that, the accused had committed an offence under Section 138 of the Negotiable Instruments Act. In this case, it is contended by the learned counsel for the appellant that, the trial court appreciated the evidence by placing the entire burden upon the appellant to establish the offence without taking into consideration of the impact of presumption as contemplated under the provisions mentioned above. The learned counsel relies on the decision in Uttam Ram v. Devinder Singh Hudan [(2019)10 SCC 287], Krishna Pillai Sree Kumar and Another v. State of Kerala {1981 (Supp)SCC 31, Vijay Alias Chinee v. State of Madhya Pradesh [(2010)8 SCC 191], Hitel P. Dalal v. Bratindranath Banerjee [(2001)6 SCC 16] and Rangappa v. Sri Mohan [2010(2)KLT 682]. 7. On the other hand, the learned counsel for the 1[st] respondent would contend that the presumption available under Section 118 and 139 of the Negotiable CRL.Appeal No. 948 of 2015 7 Instruments Act are rebuttable presumptions. It is suffice for the accused to establish a probable case against the said presumption and upon establishing such a probable case, the burden of proof shifts to the complainant. In this case, it was pointed out that, the specific case of the 1[st] respondent is that, he has not issued any cheque in favour of the appellant. In the year, 2007, he lost certain cheques and therefore he submitted stop memo in respect of the said lost cheques on 24.5.2010 which is discernible from Ext.C2. Exhibit P1 cheque is claimed to have been issued on 16.5.2011 which is almost a year after the stop memo was issued. The learned counsel for the 1[st] respondent also relies on the evidence on DW1, the Manager of the Bank who has stated that, the stop memo was issued by the 1[st] respondent on the reason that cheques were lost. In such circumstances, no presumption is available to the appellant herein. Apart from the above, it was also contended that, the case set up by the appellant is CRL.Appeal No. 948 of 2015 8 full of inconsistencies which are clearly evident from the depositions of PW1 itself. In such circumstances, the learned counsel for the 1[st] respondent sought for dismissal of this appeal. He places relies on the decision in Supply House v. Ullas [2006(3)KLT 921] . 8. The specific case of the appellant is that, the 1[st] respondent was paid an amount of Rs.3.5 lakhs as a part payment towards securing a job for the son of the appellant in a private bank. Conspicuously in the complaint, the date or year of the said payment is not seen mentioned in the complaint. However, in the chief affidavit filed by the appellant, he has stated that he has paid the amount in 2007. Another crucial aspect to be noticed is that the aforesaid complaint does not disclose as to the details of the bank where employment was offered and the nature of such employment. The purpose of such amount is also not seen mentioned in the complaint. It is the further case of the appellant that as the 1[st] respondent failed to secure a job for CRL.Appeal No. 948 of 2015 9 the son of the appellant, the 1[st] respondent agreed to return the amount and in pursuance of the same, a part payment of Rs.2 lakhs was made in July, 2008. It is further stated that even if the balance amount payable by the 1[st] respondent was Rs.1.5 lakhs, being convinced of the additional expenses incurred by the appellant for raising the amount of Rs.3.5 lakhs, the 1[st] respondent had agreed to pay an amount of Rs.3 lakhs and a cheque was issued on 16.5.2011 for the said amount. 9. When we examine the aforesaid case, certain glaring discrepancies are seen. First of all, the allegation as to the date on which the amount was paid by the appellant is not specifically mentioned in the complaint. The purpose of payment was mentioned as for securing a job for his son in a bank, the details of the said bank or the nature of employment are not seen mentioned. Apart from the above, even though the cheque is claimed to have been issued on 16.5.2011, Ext.C2 CRL.Appeal No. 948 of 2015 10 would indicate that the 1[st] respondent had issued a stop memo as early as on 24.5.2010. Thus as on the date of the cheque, the payment of the same was stopped. While considering the aforesaid aspect, the defence taken by the 1[st] respondent is very much relevant. In his 313 statement he specifically denied having issued any cheque in favour of the appellant herein. On going through the cross examination of PW1, it is discernible that the case of the 1[st] respondent is that the cheque leaves including Ext.P1 cheque were lost in the year, 2007. While he was working in the office of FCI West Hill, Kozhikode where the appellant and the 1[st] respondent worked together. The evidence of DW1 would indicate that the stop memo was issued by the 1[st] respondent as evidenced by Ext.C2 on the reason that the cheque leaves were lost. 10. Apart from the above, there are certain improbabilities in the case of the appellant as well, which would fortify the defence taken by the 1[st] CRL.Appeal No. 948 of 2015 11 respondent. Even according to the appellant, the actual amount due from the 1[st] respondent is Rs.1.5 lakhs. The remaining amount of Rs.1.5 lakhs was fixed as the compensation for the additional expenses incurred by the appellant for arranging the amount of 3.5 lakhs for making the payment to the 1[st] respondent for his son. According to the appellant, the said amount was arranged by him by borrowing the same from the fixed deposit in the name of his sister-in-law. He had to pay interest at the rate of Rs.4,000/- per month for clearing the said liability. However, there is absolutely no evidence forthcoming for substantiating the additional expense claimed to have been incurred in the manner mentioned above. Further, during the crossexamination, PW1 has stated that the 1[st] respondent had agreed to pay a total amount of Rs.3.25 lakhs towards repayment of the actual payment of Rs.1.5 lakhs with compensation. But the cheque was issued only for Rs.3 lakhs. This statement also goes against the pleading CRL.Appeal No. 948 of 2015 12 contained in the complaint. The complaint does not contain any averment indicating any agreement on the part of the 1[st] respondent to pay an amount of Rs.3.25 lakhs, but on the other hand, the only averment is that towards discharge of the said liability, he had issued a cheque for Rs.3 lakhs. When all these aspects are taken into consideration and also the specific defence taken by the 1[st] respondent, it can be safely concluded that the 1[st] respondent was able to establish a probable defence for rebutting the presumption contemplated under Sections 118 and 139 of the Negotiable Instruments Act. Once such a presumption is rebutted, it is for the appellant to prove the commission of the offence, as the burden is shifted to the appellant, as the burden is shifted to the appellant. 11. The learned counsel for the appellant places reliance upon Rangappa’s case (supra) wherein the Hon’ble Supreme Court observed about the existence of a reverse onus under Section 139 of the Act once CRL.Appeal No. 948 of 2015 13 execution of the cheque is proved. The observations contained in the said decision at paragraph 18 reads as follows: _“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_ ## CRL.Appeal No. 948 of 2015 14 _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. 15. Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the 'stop payment' instructions to his bank. Furthermore, the instructions to 'stop payment' had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under S.138 of the Act leads to the inference that_ CRL.Appeal No. 948 of 2015 15 _there was merit in the complainant's version. Apart from not raising a probable defence, the appellant - accused was not able to contest the existence of a legally enforceable debt or liability. The fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction - related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction - expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant.”_ 12. It is true that in the aforesaid decision the Hon’ble Supreme Court observed about the existence of the reverse onus in favour of the appellant. However, the said presumption comes into play only when the execution of the cheque is proved. In this case, the CRL.Appeal No. 948 of 2015 16 execution of cheque is specifically denied by the 1[st] respondent. He has a case that the cheque was lost by him in the year 2007 while he was working at FCI, Kozhikode. It is an admitted fact that, at the relevant time, the appellant was also working there. The evidence of DW1 coupled with Ext.C2 document would reveal that as early as on 24.5.2010, the 1[st] respondent had issued a stop memo in respect of a cheque in question. The issuance of cheque even according to the appellant is almost a year after the said date. When all these aspects are taken into consideration, the execution of the cheque itself is in doubt. 13. Even if it is assumed for argument for the sake that, the aforesaid cheque was indeed issued by the 1[st] respondent, even then the evidence adduced by the appellant would indicate a probable case which will have the impact of rebutting the presumption available under Section 139 of the Negotiable Instruments Act. In Rangappa’s case (supra), in the observation as CRL.Appeal No. 948 of 2015 17 extracted above, the Hon’ble Supreme Court categorically held 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. In this case, the factual situation pointed out by the appellant contains several discrepancies mentioned above which is sufficient to raise a probable defence so as to create doubts as to the existence of legally enforceable debt or liability. 14. The learned counsel for the appellant contended by relying upon the judgments in Krishna Pillai Sree Kumar’s case (supra) and Vijay Alias Chinee’s case (supra) that even if there are some omissions, contradictions and discrepancies in the evidence adduced, the entire evidence cannot be disregarded. After exercising care and caution and sifting the CRL.Appeal No. 948 of 2015 18 evidence to separate truth from untruth, exaggeration and improvements, the court comes to a conclusion as to whether the residuary evidence is sufficient to convict the accused. By relying upon the aforesaid observation, it is contended that mere discrepancies are not sufficient to discard the entire evidence. However, I am not inclined to accept the said contentions. The discrepancies mentioned above, cannot be treated as immaterial or insignificant. Even if the evidence as a whole is taken into consideration, it contains several loop-holes or lacuna in the case advanced by the appellant. 15. In addition to the discrepancies mentioned above, there are certain other aspects as well. It is evident from the deposition of PW1 that the cheque was issued by the 1[st] respondent when the 1[st] respondent came to the office of FCI, West Hill all of a sudden. It is also stated by the appellant that, when the 1[st] respondent came to the office, he was sitting in the CRL.Appeal No. 948 of 2015 19 security room of the office and the 1[st] respondent handed over a cheque for Rs.3 lakhs. The aforesaid statement is highly doubtful in the factual scenario of the case. It is also a crucial factor to be noticed that even though the appellant is claiming about a settlement on the part of the 1[st] respondent to pay the amount covered by the cheque including the actual liability and compensation, no details of such settlement such as date of the same or the persons involved in such settlement etc. are not seen mentioned. It is true that, in his evidence, he has stated that some superior officers in the office had intervened for persuading the 1[st] respondent to make the payment. He named a particular officer in the cross examination. But none of such superior officers who were part of the said settlement talks were examined. It is also stated that such settlement talk was in the year 2009 whereas the cheque is seen issued in the year 2011. Further, the said cheque is claimed to have been CRL.Appeal No. 948 of 2015 20 issued by the 1[st] respondent all of a sudden when the 1[st] respondent voluntarily came to the FCI, West Hill office and handed over the same to the appellant. None of the persons who were claimed to have interfered for persuading the 1[st] respondent to arrive at a settlement are not seen examined. When all these aspects are taken into consideration, the case of the appellant is highly improbable and hence the interference in the findings of the learned Magistrate is unwarranted. In Chandrappa and Others v. State of Karnataka [(2007)4 SCC 415], the Hon’ble Supreme Court observed as follows: _“41(4). An appellate Court, however, must bear in mind that in case of acquittal, there is double presumption in favour of the accused. Firstly, the presumption of innocence available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the Trial Court._ _(5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the Trial Court.”_ CRL.Appeal No. 948 of 2015 21 16. Thus, in the light of the above findings, I am of the view that, no circumstances are in existence for interfering in the impugned judgment passed by the trial court. I do not find any merit in any of the contentions raised by the appellant. Accordingly, this Crl.Appeal is dismissed and the judgment dated 23.07.2013 in C.C.No.820/2011 on the file of the Judicial First Class Magistrate Court-I, Kozhikode is hereby confirmed. Sd/- ZIYAD RAHMAN A.A. JUDGE pkk