P. Samuel Puthen Parambil v. C. Narayana Kumar and State of Kerala

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH FRIDAY, THE 3[RD] DAY OF DECEMBER 2021 / 12TH AGRAHAYANA, 1943 CRL.A NO. 1626 OF 2006** **AGAINST THE JUDGMENT IN CC 364/2004 OF JUDICIAL MAGISTRATE OF FIRST CLASS, MAVELIKKARA** ## **APPELLANT/COMPLAINANT:** P.SAMUEL PUTHEN PARAMBIL, PALLICKAL NADUVILE MURI,, PALLICKAL P.O. BY ADV SRI.R.BINDU (SASTHAMANGALAM) ## **RESPONDENTS/ACCUSED & STATE:** 1 C.NARAYANA KUMAR (PROPRIETOR, MODERN DRUG HOUSE),, M.P.G.BHAVAN, (PONNURUTTA VEEDU),, BHAGAVATHYPADY P.O., KAYAMKULAM. 2 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR,, HIGH COURT OF KERALA, ERNAKULAM. R1 BY ADV SRI.K.R.SUNIL, SRI SANAL P RAJ,PP THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 03.12.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Crl.Appeal No.1626/2006 -:2:- J U D G M E N T Dated this the 3[rd ] day of December, 2021 This is an appeal filed against acquittal u/s 378(4) of Cr.P.C. in a proceedings initiated u/s 138 of the Negotiable Instruments Act (for short, the NI Act) in CC No.364/2004 on the file of the Judicial First Class Magistrate Court, Mavelikara. 2. The parties are referred to in this judgment as they were referred in the impugned judgment, i.e., the complainant and the accused. 3. The complaint was filed for an offence u/s 138 of the NI Act. It was alleged that the accused borrowed a sum of `5,00,000/- from the complainant and towards the discharge of the said debt, Ext.P1 cheque was issued, that the cheque on presentation was dishonoured for the reason insufficiency of funds, that Ext.P6 notice demanding payment was not heeded to and therefore the accused committed the offence punishable u/s 138 of the NI Act. The complainant himself gave evidence as PW1. Exts.P1 to P6 were marked. No defence evidence was Crl.Appeal No.1626/2006 -:3:- adduced. The court below on appreciation of evidence found that the complainant failed to prove the transaction and the defence set up by the accused is more probable. The court below further found that Ext.P6 notice is bad and not in accordance with Section 138(b) of the NI Act. Accordingly, the accused was found not guilty and he was acquitted as per the impugned judgment. Challenging the said judgment, the complainant preferred this appeal. 4. I have heard Sri.R. Bindu Sasthamangalam, the learned counsel for the appellant, Sri.K.R.Sunil, the learned counsel for the 1[st] respondent and Sri.Sanal P.Raj, the learned Public Prosecutor. 5. The learned counsel for the appellant submitted that the complainant has succeeded in proving the execution of Ext.P1 cheque by examining PW1 and hence presumption u/s 118(a) and 139 of the NI Act would come into play and the accused has failed to rebut the said presumption. The counsel further submitted that the finding of the court below that notice is bad is without taking note of the amendment effected to Section 138(b). The court below went wrong and committed illegality in acquitting the Crl.Appeal No.1626/2006 ## -:4:- accused, argued the counsel. 6. I will first deal with the notice. It is true that notice was issued after 15 days of dishonour of the cheque. But it was issued within one month. Section 138(b) was amended on 6/2/2003. The cheque was issued on 22/8/2003. Ext.P6 notice was issued on 13/11/2003. Therefore, as on the date of the issuance of the cheque, notice need be issued within one month of the dishonour of the cheque. Hence, I hold that notice is valid and within time. 7. To prove the transaction, execution and issuance of the cheque, PW1 gave evidence. He deposed that the accused borrowed a sum of `5,00,000/- from him and in discharge of the said debt, Ext.P1 cheque was issued. On the other hand, the case of the accused is that the cheque was issued to one Sri.Saji George in blank in connection with some other transaction he had with him and the complainant misused the said cheque. 8. A negotiable instrument including a cheque carries presumption of consideration in terms of S.118(a) and under S.139 of the N.I. Act. S.118(a) and S.139 read as under: _"_ _**118. Presumptions as to negotiable instruments.--** Until the contrary is proved, the following presumptions shall be made:--_ Crl.Appeal No.1626/2006 ## -:5:- _(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 S.138 for the discharge, in whole or in part, of any debt or other liability."_ The presumption under S.139 of the Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts. The obligation on the prosecution may be discharged with the help of presumptions of law and presumptions of fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact. There is the mandate of presumption of consideration in terms of the provisions of the Act. The onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of S.138. 9. The Apex Court in _**Hiten P. Dalal v. Bratindranath Banerjee**_ [(2001) 6 SCC 16] and in _**Rangappa v. Sri Mohan**_ [(2010) 11 SCC 441] held that the cheque shall be presumed to Crl.Appeal No.1626/2006 -:6:- be for consideration unless and until, the Court forms a belief that the consideration does not exist or considers the non-existence of consideration was so probable that a prudent man would under no circumstances of the case, act upon the plea that the consideration does not exist. In _**Uttam Ram v. Devinder Singh Hudan and Another**_ [2019 (5) KHC 179], it was held that when a cheque is issued, it is presumed that the cheque was drawn for consideration and the holder of cheque received the same in discharge of an existing debt. It was further observed that: “ _A dishonour of cheque carries a statutory presumption of consideration. The holder of cheque in due course is required to prove that the cheque was issued by the accused and that when the same presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability_ ”. In _**Kumar Exports v. Sharma Carpets**_ [(2009) 2 SCC 513], the Apex Court held that “ _bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for_ Crl.Appeal No.1626/2006 -:7:- _getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist_ ”. In _**Bir Singh v. Mukesh Kumar**_ (AIR 2019 SC 2446), it was held that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It was further held that it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. It was also held that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under S.139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. Recently in _**Kalamani Tex and Another v. P. Balasubramanian**_ (2021 (2) KHC 517), the Apex Court again Crl.Appeal No.1626/2006 -:8:- held that once signature of an accused on cheque is established, then ‘reverse onus’ clause becomes operative, and in such a situation, obligation shifts upon the accused to discharge presumption imposed upon him. 10. Coming to the facts of the case, though the execution of Ext.P1 cheque is denied by the accused, he did not dispute his signature therein Thus, once the accused had admitted his signature in Ext.P1 cheque, the Court below ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. That apart, the evidence of PW1 is sufficient to prove the transaction, execution and issuance of the cheque. PW1 has categorically stated that the cheque was executed and issued by the accused in his presence. There is nothing to disbelieve the said version. As to the source, PW1 deposed that he had `3,00,000/- cash with him and the rest of the amount was withdrawn by him from the bank. The court below observed that Ext.P7 ledger account produced by the complainant does not show such withdrawal. But on a perusal of case records, I find that no such document as Ext.P7 is produced. Thus, the complainant has given evidence about his source also. Crl.Appeal No.1626/2006 -:9:- Once signature, execution and handing over of the the cheque is satisfactorily proved, the presumption u/s 138 of the Act would come into play. The complainant has successfully established the signature, execution and handing over of the cheque. Even though the defence contended that the cheque in question was issued to one Sri.Saji George, no step was taken to examine him. No evidence has been adduced by the accused to substantiate the said defence version. There is absolutely no evidence or circumstances probablising the defence set up by the accused. The Apex Court in _**Ravi Kapur v. State of Rajastan**_ [(2012) 9 SCC 284] has held that once the trial Court has ignored the material piece of evidence and failed to appreciate the prosecution evidence in the correct perspective, then it would amount to failure of justice enabling the appellant to interfere with the judgment of acquittal. The impugned judgment of acquittal, thus, cannot be sustained and is liable to be set aside. 11. In the light of the above findings, the judgment of acquittal dated 3/5/2006 passed by the Judicial First Class Magistrate Court, Mavelikara in CC No.364/2004 is hereby set aside and the accused is found guilty for the offence punishable Crl.Appeal No.1626/2006 -:10:- u/s 138 of the NI Act and he is convicted for the said offence. The accused is sentenced to undergo simple imprisonment till rising of the court and to pay a compensation of `5,50,000/- u/s 357(3) of Cr.P.C. to the complainant, in default he shall suffer simple imprisonment for a period of six months. The appeal is allowed. ## **Sd/-** **DR. KAUSER EDAPPAGATH** **JUDGE** **Rp**