P. Vinod v. Somasundharan K. and The State of Kerala

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MRS. JUSTICE MARY JOSEPH WEDNESDAY, THE 24[TH] DAY OF MAY 2023 / 3RD JYAISHTA, 1945 ``` ``` CRL.A NO. 154 OF 2020 ``` ``` AGAINST THE JUDGMENT DATED 15.10.2019 IN S.T.NO.3123/2015 OF JUDICIAL FIRST CLASS MAGISTRATE COURT, MALAPPURAM ``` ## **`APPELLANT:`** ``` P.VINOD, SECRETARY IN CHARGE, KOTTAKKAL JANAKEEYA CO-OPERATIVE URBAN SOCIETY, KOTTAKKAL, MALAPPURAM. BY ADVS.SRI.P.P.JACOB SMT.MARIYAM JACOB ``` ## **`RESPONDENTS:`** ``` 1SOMASUNDHARAN K., KALYANI SOUDHAM, MUNDUPARAMBA.P.O., MALAPPURAM DISTRICT-676503. (MALAPPURAM POLICE STATION LIMIT) 2THE STATE OF KERALA, REPRESENTED BY ITS PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, KOCHI-682031. BY ADVs R1 BY SRI.K.T.SIDHIQ R2 BY SMT.SEENA C, PUBLIC PROSECUTOR ``` ``` THIS CRIMINAL APPEAL HAVING COME UP FOR HERAING ON 24.05.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` Crl.Appeal No.154 of 2020 ``` ``` 2 ``` ## **JUDGMENT** ## **Dated this the 24[th] day of May, 2023** The appeal on hand is originated from a judgment passed by Judicial First Class Magistrate Court, Malappuram (for short ‘the trial court’) on 15.10.2019 in S.T.No.3123/2015. 2. The appellant is the complainant in S.T.No.3123/2015 which is a prosecution launched on the basis of a complaint filed by him under Section 142 of Negotiable Instruments Act, 1881 (for short ‘the NI Act’) alleging commission of an offence punishable under Section 138 NI Act. The trial court on being convinced from the sworn statement recorded from the complainant that a _prima facie_ case is made out, took cognizance and issued process to the accused for his appearance before the court. Accused entered appearance on summons being served on him. The accusations made against him in the complaint, were read over and explained to him. He pleaded not guilty and claimed ``` Crl.Appeal No.154 of 2020 ``` ``` 3 ``` to be tried. 3. The trial was commenced and the complainant examined himself as PW1 and marked Exts.P1 to P7 in evidence. The accused was questioned with reference to the incriminating circumstances brought on record against him by the complainant and he denied all those. Accused had taken a specific stand during examination under Section 313(1)(b) of the Code of Criminal Procedure, 1973 (for short ‘Cr.P.C’) that a cheque leaf was obtained by the complainant from him while he was working in an Arya Vaidya Sala and misusing it, the prosecution in question was launched. Grounds having not been made out to record an order of acquittal of the accused, he was asked to adduce evidence in defence, but he did not. 4. The Trial court found that the complainant failed to prove the execution of the cheque beyond reasonable doubt and accordingly acquitted the accused. Aggrieved by the judgment and challenging it as illegal, the appeal on hand was filed. 5. According to Sri.P.P. Jacob, the learned counsel, the ``` Crl.Appeal No.154 of 2020 ``` ``` 4 ``` acquittal of the accused by the trial court is illegal and therefore the judgment assailed in the appeal is only to be reversed and the respondent is to be found guilty of the offence under Section 138 N.I. Act, convicted and sentenced. 6. According to him, the ingredients constituting the offence under Section 138 N.I. Act have been complied with by the complainant and those are substantially proved by the documents marked in evidence. According to him, the trial court has relied on **Joseph M.J. v. Gladis Sasi** [2010 (3) KLT 379], **Padmanabhan v. Vasudevan Namboodiri** [2010 (3) KLT 216] and **Santhi v. Mery Sherly and Another** [2011 (3) KLT 273] to take a view that mere admission of signature in a blank cheque alone will not constitute admission of execution of a cheque. 7. According to the learned counsel the presumption under Section 139 N.I. Act will be attracted in a case where the accused either admits the drawal of the cheque or else the complainant establishes that the cheque was drawn by the accused. According to him, when there was no admission ``` Crl.Appeal No.154 of 2020 ``` ``` 5 ``` from the accused of execution of the cheque or it was not proved by evidence, the presumption under Section 139 N.I. Act would not be attracted. According to him, the standard of proof required for rebutting the presumption is to bring preponderance of probabilities. The learned counsel urged in the context that if the accused is able to raise a probable defence which creates doubt in the mind of the court about existence of a legally enforceable debt or liability, the prosecution will fail. The learned counsel urged that the decisions relied on by the trial court are not applicable in the case on hand and therefore, those ought not to have been relied on by the trial court to enter into a finding that the accused has not committed the offence under Section 138 N.I. Act. According to him, the specific stand taken by the defence in the prosecution was that the disputed cheque was drawn from his account and was given to one Mr.Gopikrishnan. 8. According to him that itself is sufficient to discard the contentions of the accused in the prosecution. According to him, once the complainant has successfully complied with all ``` Crl.Appeal No.154 of 2020 ``` ``` 6 ``` legal and other required formalities, the presumption under Section 139 would be attracted in his favour. According to him, the accused has not rebutted the presumption in any of the manner possible. According to the learned counsel the impugned judgment was filed without appreciating the evidence in the proper perspective and therefore is liable to be reversed. According to the learned counsel, the factum that the accused failed to reply the lawyer notice sent to him prior to the launching of the prosecution is also an added factor to discard the stand adopted by the accused in the case. 9. The evidence in the case from the side of the complainant consists of his testimony as PW1 and the documents marked in evidence as Exts.P1 to P7. 10. Complainant is a society by name Janakeeya Cooperative Urban Society and was represented by it’s representative authorised to act on its behalf. Ext.P7 is the copy of the extract of the minutes of the meeting of the Governing body of the Society on 25.03.2015. Himself as PW1 deposed that a loan of `50,000/- was availed by the accused ``` Crl.Appeal No.154 of 2020 ``` ``` 7 ``` from the Janakeeya Co-operative Urban Society, Kottakal and that a cheque issued to it towards discharge of the debt was dishonoured for insufficiency of funds in the account maintained by the accused. 11. A lawyer notice was issued by the complainant to the accused on 23.05.2015 intimating the factum of dishonour of the cheque and demanding repayment of the debt. The accused received the notice but did not send a reply. 12. As per the case of the accused, he was a colleague of Mr.Gopikrishnan. According to him, Mr.Gopikrishnan somehow managed to obtain a cheque from him and that was misused by the complainant to file the prosecution on hand which is false in all respects. As far as the cheque is concerned, except the signature, there is total denial of the allegations, by the accused. Accused also does not admit existence of a legally enforceable debt. Accused also denied delivery of the cheque to the complainant for the purpose asserted by the complainant and the filling up of the entries in ``` Crl.Appeal No.154 of 2020 ``` ``` 8 ``` the cheque. 13. Therefore, this is a case where issuance of the disputed cheque to the complainant for the purpose as pleaded by the complainant is denied by the accused. He also denied to have authored the writings in the cheque but, admitted to have authored the signature there. The factum remains is that the disputed cheque is now in the possession of the complainant and on it’s basis the prosecution in question was launched. According to the complainant `50,000/- borrowed by the accused form the Society represented by him and the disputed cheque was drawn and given by the accused, to discharge that debt. According to him, the cheuqe was signed and the entries of it were filled up at the time of it’s delivery to him. 14. The accused admitted the signature but denied to have authored the entries in the cheque. According to him the cheque was issued by him to Mr.Gopikrishnan and the complainant obtained the same from him and launched the prosecution falsely by misusing it. ``` Crl.Appeal No.154 of 2020 ``` ``` 9 ``` 15. The accused has not denied the drawal of the cheque from the account maintained by him. When the accused has projected a stand that the cheque was given to Mr.Gopikrishnan and the complainant obtained it and misused it for launching the prosecution, it is for him to establish the manner in which it was obtained by him. The accused does not have a case that the disputed cheque was given by Mr.Gopikrishnan to the complainant or that the complainant has stolen it from Mr.Gopikrishnan. The accused also failed to say about the kind of transaction which caused him to draw and issue a signed cheque to Mr.Gopikrishnan. 16. Mr.Gopikrishnan was not examined as a witness to establish the manner in which the possession of the disputed cheque was obtained by the complainant. Since the issuance of the cheque to Mr.Gopikrishnan was admitted by the accused, without any evidence being let in by the accused about theft of the cheque or obtaining it in a forceful manner by the complainant, the cheque being a negotiable instrument, it’s possession can only be presumed as handed ``` Crl.Appeal No.154 of 2020 ``` ``` 10 ``` over voluntarily. 17. The law on prosecution under Section 138 NI Act has been settled with the dictum laid down by the Apex Court in **Bir Singh v. Mukesh Kumar** [2019 (1) KHC 774 (SC)]. It was held: “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 respondent-accused 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. xxx 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.” Therefore, with the voluntary issuance of a signed cheque the presumption under Section 139 NI Act would be attracted. The decisions relied on by the trial court stating that execution ``` Crl.Appeal No.154 of 2020 ``` ``` 11 ``` of the cheque has to be established by the complainant has been changed with the laying of the dictum as above in **Bir Singh** supra. 18. Section 139 NI Act is extracted hereunder for easy reference: “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 section138, for the discharge, in whole or in part, of any debt or other liability.” As the provision says, the presumption once attracted would be there till it stands rebutted by the person against whom it operates and it being rebuttable, the latter has to rebut it. 19. The Apex Court in **Bir Singh** supra has also held as follows: “37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and S.139, makes it amply clear 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 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. If the cheque ``` Crl.Appeal No.154 of 2020 ``` ``` 12 ``` is otherwise valid, the penal provisions of Section 138 would be attracted.” “42. In the absence of any finding that the cheque in question was not signed by the respondent-accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellant-complainant, it may reasonably be presumed that the cheque was filled in by the appellant-complainant being the payee in the presence of the respondent-accused being the drawer, at his request and/or with his acquiescence. The subsequent filling in of an unfilled signed cheque is not an alteration.xxxx” Therefore, who authored the entries in the disputed cheque also lost relevance in a prosecution under Section 138 NI Act when voluntary issuance of a signed cheque stands established from the circumstances of the case. 20. Section 138 NI Act is extracted hereunder to have an idea about the ingredients that constitute the offence. “ **138. Dishonour of cheque for insufficiency, etc., of funds in the account.** —Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with ``` Crl.Appeal No.154 of 2020 ``` ``` 13 ``` that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless— (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.—For the purposes of this section, “debt of other liability” means a legally enforceable debt or other liability.” 21. The complainant therefore have to establish the following aspects to establish his case for a successful prosecution under Section 138 NI Act: “(a) Issuance of a cheque ; (b) Presentation of the cheque to the bank for encashment; (c) Dishonour of the same for insufficiency of funds or the reason, refer to drawer; ``` Crl.Appeal No.154 of 2020 ``` ``` 14 ``` (d) issuance of lawyer notice to the accused; and (e) non-issuance of reply notice or repayment of the money demanded by the notice within 15 days from the date of receipt of the notice.” 22. In the case on hand, the complainant has established the issuance of Ext.P1 by the accused to it, presentation of it for encashment at the bank, dishonour of it by the bank for the reason, insufficiency of funds in the account of the accused through Ext.P3 and issuance of the statutory notice as mandated under Section 138(b) NI Act through Exts.P4 to P6. It also stands proved from Ext.P6 that the notice was received by the accused on 26.05.2015 but he failed to send a reply. It also stands proved that the payment of the amount demanded by the notice was not made by the accused. Therefore, the complainant was constrained to launch the prosecution. 23. The accused did not adduce any evidence to establish on the contrary. Mere raising of an allegation that Ext.P1 cheque handed over to Mr.Gopikrishnan was obtained by the complainant and misused for launching the prosecution would not suffice to rebut the presumption. The accused cross ``` Crl.Appeal No.154 of 2020 ``` ``` 15 ``` examined PW1 elaborately, but preponderance of probabilities to doubt the case projected by the complainant could not be brought out. The accused did not even attempt to adduce independent evidence with a view to rebut the presumption that stands attracted in favour of the complainant. 24. The trial court on a wrong appreciation of evidence on it’s record found the prosecution as defeated and acquitted the accused. The trial court went wrong in doing so. The impugned judgment deserves to be reversed and this Court do so. 25. Appeal succeeds for the reasons and is allowed. The judgment assailed in the appeal is reversed. The complaint is allowed. The accused is found guilty for the offence under Section 138 NI Act. He is convicted and sentenced to undergo imprisonment till rising of the court and to pay a fine of `50,000/- before the trial court within one month from the date on which a certified copy of this judgment is received. In case of default in paying the fine amount, he is also ordered to undergo simple imprisonment ``` Crl.Appeal No.154 of 2020 ``` ``` 16 ``` for two months. The fine amount on deposit shall be defrayed as compensation to the complainant under Section 357(3) Cr.P.C. In case the accused has not turned up voluntarily to serve the sentence and to pay the fine amount, his presence shall be procured by issuance of a compulsory process permitted legally. The trial court shall proceed to execute the sentence in case the accused failed to comply with the directions issued as above. Sd/- **MARY JOSEPH JUDGE** NAB