Prakashan P. v. State of Kerala and Manappuram General Finance & Leasing (P) Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE C.S.DIAS** **THURSDAY, THE 9[TH] DAY OF NOVEMBER 2023 / 18TH KARTHIKA, 1945 CRL.REV.PET NO. 1410 OF 2011** **AGAINST THE ORDER/JUDGMENT ST 4476/2005 OF JUDICIAL MAGISTRATE OF FIRST CLASS -II,THRISSUR** ## **CRA 738/2008 OF ADDITIONAL DISTRICT COURT(ADHOC II), THRISSUR REVISION PETITIONER/S:** PRAKASHAN P., S/O SUBRAMANIAN, PAYYAPPANDA HOUSE, PERUVAZHIYAMBALAM,, POOKAYIL, TIRUR, MALAPPURAM DISTRICT. BY ADVS. SRI. K.SIJU SMT.BINDU GEORGE ## **RESPONDENT/S:** 1 STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,, ERNAKULAM. 682031 2 MANAPPURAM GENERAL FINANCE & LEASING (P) LTD., MANAPURAM HOUSE, VALAPPAD. 676103 ## **OTHER PRESENT:** SR PP SMT PUSHPALATHA M K THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 09.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: CRL.REV.PET NO. 1410 OF 2011 2 (Dated this the 9[th] day of November, 2023) ## **ORDER** The revision petitioner calls in question the legality, propriety and correctness of the judgment in Criminal Appeal No.738/2008 of the Court of the Additional Sessions Judge (Fast Track Court No.II – Adhoc), Thrissur (Appellate Court) confirming the judgment in S.T.No.4476/2005 of the Court of the Judicial First Class Magistrate-II, Thrissur (Trial Court) convicting and sentencing the revision petitioner for the offence under Section 138 of the Negotiable Instruments Act (in short, “N.I.Act”). The revision petitioner was the accused and the 2[nd] respondent was the complainant before the Trial Court. ## The facts in brief: 2. The 2[nd] respondent had filed the complaint before the Trial Court against the revision petitioner alleging that the revision petitioner had availed financial assistance from the 2[nd] respondent to purchase a motor cycle bearing registration No.KL-10T-738 and in discharge of an amount CRL.REV.PET NO. 1410 OF 2011 3 of Rs.16,169/- he had issued Ext.P2 cheque. The cheque, on presentation to the bank for collection, got dishonored by Ext.P4 memorandum on the ground of 'insufficiency of fund'. Despite issuing Ext.P5 statutory lawyer notice, the revision petitioner failed to pay the demanded amount. Hence, he committed the offence under Section 138 of the N.I.Act. ## Trial 3. The revision petitioner pleaded not guilty to the substance of accusation read over to him. In the Trial, the 2[nd] respondent got his agent examined as PW1 and marked Exts.P1 to P9 in evidence. The revision petitioner denied the incriminating circumstances appearing against him in the evidence in the questioning under Section 313 of the Code. The accused did not let in any defence evidence. ## Trial Court Judgment 4. The Trial Court, after analysing the materials on CRL.REV.PET NO. 1410 OF 2011 4 record, found the revision petitioner not guilty and convicted him for the offence under Section 138 of the N.I.Act and sentenced him to undergo simple imprisonment for a period of three months and pay a compensation of Rs.17,000/- and in default to undergo simple imprisonment for a further period of three months. 5. Aggrieved by the said judgment, the revision petitioner had filed Criminal Appeal No.738/2008 before the Appellate Court. ## Appellate Court judgment 6. The Appellate Court, after re-appreciating the materials on record, by the impugned judgment, confirmed the conviction; but modified the sentence by directing the revision petitioner to undergo imprisonment till the rising of the Court and pay Rs.17,000/- as compensation with the same default sentence. 7. Confronted with the concurrent judgments of the courts below; the revision petition is filed. CRL.REV.PET NO. 1410 OF 2011 5 8. Heard; Sri.Siju Kamalasanan, the learned Counsel appearing for the revision petitioner and the learned Public Prosecutor appearing for the 1[st] respondent-State. 9. Is there any illegality, impropriety or irregularity in the judgments of the courts below. 10. It is nigh well settled that the revisional jurisdiction of this Court is to be sparingly exercised and only in cases of exceptional rarity. Unless there is a manifest error, illegality or perversity, or a misreading of the records, this Court should be slow in interfering with the findings of the fact finding courts. 11. The 2[nd] respondent's case is that the revision petitioner had availed financial assistance from them and in discharge of the liability had issued Ext.P2 cheque for Rs.16,169/-. The cheque got dishonored due to insufficiency of funds in the bank account and despite issuing Ext.P5 statutory demand notice, the accused had failed to pay the demanded amount. CRL.REV.PET NO. 1410 OF 2011 6 12. Even though the revision petitioner had sent Ext.P8 reply notice, he did not let in any defence evidence. 13. 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 accept, transferred for consideration; indorsed, negotiated or 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”. 14. A three-Judge Bench of the Hon’ble Supreme Court in **Rangappa vs. Sri. Mohan** [2010 KHC 4325], while dealing 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 CRL.REV.PET NO. 1410 OF 2011 7 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”. 15. 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 CRL.REV.PET NO. 1410 OF 2011 8 ## 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).” ## 16. The revision petitioner has admitted the execution of Ext.P2 cheque. ## 17. In **Rangappa v. Sri.Mohan** (supra) the Hon'ble Supreme Court has held that, once a cheque is dishonoured, the reverse onus of proof shifts to the accused under Section 139 of the N.I. Act. 18. In **Kalamani Tex and Anr.** (supra) the Hon'ble Supreme Court has held that, even if a blank cheque is voluntarily signed and handed over by the accused towards some payment, then the statutory presumption under Section 139 of the N.I. Act cannot be obliterated, CRL.REV.PET NO. 1410 OF 2011 9 unless a probable defence is set up. 19. In the instant case, although the revision petitioner had sent reply notice, inter-alia, contending that, as the vehicle was re-possessed by the 2[nd] respondent, his liability to pay the balance amount had come to an end. Undisputedly, there is no material to substantiate the said assertion. The revision petitioner has failed to discharge the reverse onus of proof, as to the mandate under Section 139 of the N.I. Act. 20. The courts below, on an appreciation of the materials placed on record, have concurrently concluded that Ext.P2 cheque was issued by the revision petitioner in discharge of a legally enforceable debt. I do not find any error, illegality or impropriety in the findings rendered by the courts below to take a contrary view. Thus, I confirm the concurrent conviction and sentence passed by the courts below. 21. At the said point of time, the learned Counsel appearing for the revision petitioner prayed that the revision petitioner may be granted at least three months CRL.REV.PET NO. 1410 OF 2011 10 time to pay the compensation amount. He submitted that the revision petitioner had deposited an amount of Rs.6,000/- at the time of suspension of the execution of sentence before the Trial Court, pursuant to the interim order dated 07.07.2011 passed by this Court. As the revision petition is of the year 2011 and the execution of the sentence was suspended, I find the above submission to be reasonable and justifiable. Hence, I am inclined to accept the said submission. In the result, - (i) The revision petition is dismissed; - (ii) The conviction and sentence passed by the courts below are confirmed; - (iii) The revision petitioner is directed to appear before the Trial Court on 09.02.2024 to undergo the substantive sentence and pay the compensation amount; - (iv) Needless to mention, if the revision petitioner has already paid any amount before the court below, he is only liable to deposit the balance amount. CRL.REV.PET NO. 1410 OF 2011 11 - (v) In case of failure of the revision petitioner to appear before the Trial Court to undergo the substantive sentence and pay the compensation amount, the Trial Court shall execute the sentence, recover the compensation and implement the default sentence. - (vi) The execution of sentence of the revision petitioner shall stand deferred till 08.02.2024. - (vii) If the compensation amount is deposited, the same shall be released to the 2[nd] respondent. - (viii) The Registry is directed to forthwith forward a copy of the order to the Trial Court for compliance. Sd/- **C.S.DIAS JUDGE** rkc/09.11.23