P. Vinod v. Sivadasan and The State of Kerala

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MRS. JUSTICE MARY JOSEPH`** ``` WEDNESDAY, THE 20[TH] DAY OF DECEMBER 2023/29TH AGRAHAYANA, 1945 ``` ``` CRL.A NO. 948 OF 2020 ``` ``` AGAINST THE JUDGMENT DATED 28.01.2020 IN S.T.NO.916 OF 2016 OF THE COURT OF JUDICIAL FIRST CLASS MAGISTRATE, MALAPPURAM APPELLANT: ``` ``` P.VINOD, SECRETARY IN CHARGE, KOTTAKKAL JANAKEEYA CO-OPERATIVE URBAN SOCIETY, KOTTAKKAL, KOTTAKKAL P.O, MALAPPURAM. ``` ``` BY ADVS. SRI.P.P.JACOB SMT.MARIYAM JACOB ``` ## **`RESPONDENTS:`** - **`1 SIVADASAN, S/O. KADINGI, PERKKATTARA HOUSE, IRINGALLOOR P.O, IRINGALLUR, MALAPPURAM - 676304.`** - **`2 THE STATE OF KERALA REPRESENTED BY ITS PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, KOCHI – 682 031. BY ADV. SRI.LIJI.J.VADAKEDOM`** ``` SMT.SEENA C, PUBLIC PROSECUTOR ``` ``` THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 15.06.2023, THE COURT ON 20.12.2023 DELIVERED THE FOLLOWING: ``` Crl.A. No. 948 of 2020 -:2:- ## **MARY JOSEPH, J.** - - - - - - - - - - - - - - - - - - - - - - - ## Crl.A. No. 948 of 2020 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 20[th] day of December, 2023 ## **JUDGMENT** The appeal on hand is preferred against a judgment passed by Judicial First Class Magistrate Court, Malappuram (for short ‘the trial court') on 28.01.2020 in ST No.916 of 2016. ST No.916/2016 was originated from a complaint filed by the appellant before the trial court, under Section 142 of the Negotiable Instruments Act, 1881 (for short ‘N.I. Act’) to launch a prosecution under Section 138 N.I. Act. 2. For the sake of convenience, the parties to this appeal will hereinafter be referred to as the complainant and the accused. 3. A brief discussion about the facts of the case is made hereunder: The complainant was the Secretary-in-charge of Janakeeya Co-operative Urban Society, Kottakkal (for short, ‘the Society’) and she was authorised to file the complaint on behalf of it. The Crl.A. No. 948 of 2020 -:3:- accused and his son availed loans amounting to `25,000/- each from the Society in the year 2005. Towards the discharge of the aforesaid monetary liabilities, the accused issued a cheque, dated 06.12.2013 for `1,28,000/- in favour of the Society. The cheque was presented on 13.01.2014 for encashment before Malappuram District Co-operative Bank, Kottakkal but was returned bounced with a memo intimating the reason that the account wherefrom it was drawn was closed. Notice as contemplated under Clause (b) of the proviso to Section 138 N.I. Act was issued to the accused on 01.02.2014. The notice was received by the accused on 03.02.2014, but failed to respond or to pay the amount covered by the cheque. Therefore, the prosecution was launched alleging that the accused has committed the offence punishable under Section 138 N.I. Act. 4. Accused entered appearance on process being served on him following cognizance taken by the trial court. He was served with copies of the relevant documents proposed to be relied on by the complainant in the prosecution. Substance of the accusations raised against the accused in the complaint were Crl.A. No. 948 of 2020 -:4:- read over and explained to him. He pleaded not guilty and claimed to face trial. Therefore, the trial was commenced. 5. The then Secretary of the Society was examined as PW1 and Exts.P1 to P10 were marked. On closure of the evidence of the complainant, the incriminating circumstances brought on record in evidence, were put to the accused, but he denied all those. The son of the accused was examined as DW1 and Ext.D1 was marked. 6. The counsel representing the parties were heard. The oral as well as the documentary evidence on record were appreciated. Ultimately a finding was arrived at by the trial court that the accused is not guilty of the offence under Section 138 N.I. Act and thus, acquitted him. The unsuccessful complainant is before this Court now in the appeal on hand. 7. Sri.P.P. Jacob and Sri.Liji J Vadakkedom, the learned counsel, respectively advanced arguments for the complainant and the accused. The learned counsel for the complainant urged that the reasoning adopted by the trial court on the basis of the decisions relied on and referred to in the judgment assailed is against the proposition of law stood settled by the Apex Court Crl.A. No. 948 of 2020 -:5:- now in **Bir Singh Vs. Mukesh Kumar** [2019 (1) KHC 774 (SC)]. According to him, the notice admittedly sent by the complainant to the accused intimating the loan arrears and marked in evidence as Ext.D1 itself, creates suspicion on the veracity of the monetary transaction relied on by the complainant. 8. It was also contended that since the complainant has complied with all the statutory formalities envisaged under Section 138 N.I Act, he is entitled to have the presumption under Section 139 N.I Act attracted in his favour. According to him, the accused failed to rebut the presumption. The learned counsel contended furthermore that the trial court is totally erred in taking a view that the complainant must prove execution of the disputed cheque in a prosecution under Section 138 N.I Act. Raising contentions as above, the learned counsel canvassed for allowing the appeal and setting aside the impugned judgment. 9. Per contra, Sri.Liji J Vadakkedom, the learned counsel for the accused pointed out that the finding of the trial court that the accused is not guilty for the offence under Section 138 N.I. Act has been arrived at in the correct perspective, on the strength of the available evidence and interference is totally uncalled for. Crl.A. No. 948 of 2020 -:6:- 10. Before the trial court, the then Secretary of the Cooperative Society was examined as PW1 and Exts.P1 to P10 were marked. On closure of the evidence of the complainant, the accused was questioned with reference to the incriminating circumstances brought out in evidence by the complainant. He denied all those. The son of the accused was examined as DW1 and Ext.D1 was marked in evidence on the defence side. 11. The learned counsel representing the parties were heard. The evidence on record were appreciated by the trial court and arrived at a finding that the accused is not guilty of the offence under Section 138 N.I Act and acquitted him. 12. Apart from advancing arguments, the learned counsel have also placed decisions of various courts for reliance. 13. The law on prosecution under Section 138 N.I Act is now settled by the Apex Court in **Bir Singh** supra. It has been held by the Apex Court that if a signed blank cheque is voluntarily presented to a payee towards some payment, the payee may fill up the amount and other particulars in the cheque but that would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not issued to Crl.A. No. 948 of 2020 -:7:- discharge a debt or other monetary liability, by adducing evidence. The case on hand is required to be dealt with in the backdrop of the position of law settled. 14. The specific case of the complainant was that two loans each of `25,000/- have been availed by the accused and his son from the complainant and each of them stood as surety in the respective transactions. It is the case of PW1, the secretary of the Society examined on it’s behalf on due authorisation that loan arrears was not paid and thereupon the accused was called to the Society and thereafter in the negotiations had with the Society he had undertaken to pay `1,28,000/- which according to him also takes within, the loan dues from his son. 15. The accused denied the above version of the complainant and the drawal and issuance of the cheque by the accused to discharge the liability. According to him, a cheque signed with entries blank was issued by him as security in a separate transaction of loan and it was misused by the complainant and the prosecution in question was falsely launched. Crl.A. No. 948 of 2020 -:8:- 16. Admittedly a signed cheque with it’s entries unfilled was issued by the accused to the complainant as security in a loan transaction. Therefore, voluntary issuance of the cheque in question to the complainant is established. When a signed cheque was admittedly issued by the accused to the complainant voluntarily that would be sufficient to attract the presumption under Section 139 N.I Act as held by the Apex Court in **Bir Singh** supra. ## The dictum laid down by the Apex Court in **Bir Singh** supra is extracted hereunder:- “38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. 39. It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondentaccused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. Xx xx Crl.A. No. 948 of 2020 ## -:9:- 40. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 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.” 17. The presumption under Section 139 N.I Act undoubtedly is a rebuttable one and therefore, it would remain attracted in favour of the complainant unless rebutted by the accused. 18. In **Rajaram, S/o.Sriramulu Naidu through LRs v. Maruthachalam through LRs** [2023(1) KHC 382] relied on by the learned counsel for the accused, the Apex Court has held that in order to rebut the presumption under Section 139 N.I Act, it is enough that the defence raised by the accused satisfies the standard of preponderance of probabilities. 19 In **Veluchandran v. Vilasini Amma and Others** [2020 KHC 47] relied on by the accused, the dictum laid down was as follows:- “21. To rebut the statutory presumptions an accused is not expected to prove his defence beyond Crl.A. No. 948 of 2020 -:10:- reasonable doubt as is expected of the complainant in a criminal trial. XX XX The court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated.” 20. Therefore, the evidence adduced by the accused in the case on hand require a scrutiny to find out, whether he was successful in rebutting the presumption stood attracted in favour of the complainant. 21. The specific stand taken by the accused was that Ext.P1 cheque was given to the complainant as security in a separate loan transaction and it was misused by the complainant to launch the prosecution on hand. 22. Even going by the case of the complainant, `25,000/each was availed as loan by the accused and his son from the Society in the year 2005. The complainant has not spoken about the rate of interest payable for the loan amount. It’s specific case was that the loan amount was not repaid and therefore, the accused was called to the Society and in the negotiations had Crl.A. No. 948 of 2020 -:11:- there among them, the accused had undertaken to settle the liability outstanding from him as well as his son to the Society. Accordingly, `1,28,000/- was arrived at and Ext.P1 cheque was drawn and issued to the Society. 23. PW1 was the Secretary of the Society and he has been authorised through Ext.P7 to depose on behalf of the Society. He was not the Secretary of the Society at the relevant time when loan was availed by the accused as well as his son from the Society. He deposed as if he had no definite knowledge about various aspects of the loan transaction. 24. One Mrs.Sreeja was the Secretary of the Society at the relevant time of availing of the loan by the accused as well as his son from the Society. She was not examined for the reason of her termination from the post for manipulating the records of the Society. Therefore, the complainant failed to establish how come `1,28,000/- was payable by the accused in a loan transaction where only `25,000/- was borrowed by him. 25. As PW1, the complainant would say that the monetary liability of `1,28,000/- undertaken to be paid by the accused to the Society was also inclusive of the loan dues of his son. The Crl.A. No. 948 of 2020 -:12:- son of the accused was examined as DW1 and his specific stand was that his father was never asked to discharge his dues to the Society. When the liability to pay `1,28,000/- was strictly denied by the accused, the complainant has to establish that. The complainant being a co-operative society is bound to maintain ledgers and account books in its ordinary course of business in respect of the loan transactions, it dealt with. In the case on hand, it failed to produce any of those. 26. Ext.D1 marked in evidence from the side of the accused assumes relevance in the context. Ext.D1 is nothing but a notice issued from the Society to the accused where the balance amount due from the accused was shown only as `21,900/-. According to PW1, the amount shown in Ext.D1 was the principal amount of loan availed by the accused. When the specific case of the complainant was that `25,000/- was availed as loan by the accused and when it has no case that any part payment to the loan has been made by the accused, how come `21,900/- was shown in Ext.D1 issued by the Society to the accused is not known. What could be seen from Ext.D1 was that the accused was called upon by the Society on 04.07.2018 to pay Crl.A. No. 948 of 2020 -:13:- a sum of `21,900/-. Whereas in the disputed cheque, the amount was shown as `1,28,000/-. These aspects undoubtedly creates suspicion about the case of the complainant. 27. In **Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel and Another** [2022(7) KHC 61] and **Joseph Sartho v. G.Gopinathan and another** [2008(4) KHC 463] relied on by the learned counsel for the complainant it was held that when endorsements are not made on the cheque about the part payments received towards the loan transaction and if a prosecution is launched for full amount shown in the cheque, an offence under Section 138 N.I Act would not be attracted. The legal backdrop to hold so is contained in Section 56 of the N.I Act. The dictums relied on is not applicable in the case on hand since no claim was there either for the complainant or for the accused that part payments have been made towards loan dues. 28. From the discussion made hereinabove, this Court is convinced that the accused had successfully drawn preponderance of probabilities in the case of the complainant while cross examining PW1 and by marking Ext.D1 in evidence. Therefore, he can be taken to have rebutted the presumption Crl.A. No. 948 of 2020 -:14:- under Section 139 N.I Act. Therefore, he is entitled for acquittal. The trial court has held so after appreciating the evidence on record in it’s proper perspective. The judgment of the trial court assailed in this appeal, deserves no interference. Appeal fails for the reasons and is dismissed. The judgment of the trial court is confirmed. Sd/- **MARY JOSEPH, JUDGE.** ttb