VIMAL KUMAR v. DINESH KUMAR and STATE OF KERALA

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE C.S.DIAS ``` ``` FRIDAY, THE 20[TH] DAY OF OCTOBER 2023 / 28TH ASWINA, 1945 ``` ``` CRL.A NO. 1855 OF 2011 ``` ``` AGAINST THE JUDGMENT CC 246/2008 OF JUDICIAL MAGISTRATE OF FIRST ``` ## **`CLASS , KAYAMKULAM`** ## **`APPELLANT/COMPLAINANT:`** ``` VIMAL KUMAR, AGED 34 YEARS,MAROOR KIZHAKKETHIL, SOUTH MANKUZHY,BHARANIKAVU. ``` ``` BY ADV SRI.S.PRAKASH ``` ## **`RESPONDENTS/ACCUSED AND THE STATE:`** ``` 1DINESH KUMAR, AGED 35 YEARS ACHUTHALAYAM,MATTACHIRA,PALLIKKAL P.O, MAVELIKKARA 690 503. ``` ``` 2STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM, 682 031. ``` ``` SMT. SEETHA PUBLIC PROSECUTOR ``` ``` THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 20.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ## **`Crl.A NO. 1855 OF 2011 2`** ## **Dated this the 20[th] day of October, 2023** ## **JUDGMENT** The appeal is filed questioning the legality and correctness of the judgment passed in C.C. No.246/2008 by the Court of the Judicial First Class Magistrate, Kayamkulam, holding the first respondent/accused not guilty for the offence under Section 138 of the Negotiable Instruments Act (‘Act’, for short) and consequently acquitting the accused. The appellant was the complainant and the first respondent was the accused in the above case. For the sake of convenience, the parties are, referred to as per the status before the Trial Court. ## Facts in brief 2. The complainant had filed the above complaint against the accused alleging that the accused had borrowed a sum of Rs.1,50,000/- from the complainant on 1.10.2007, and in discharge of the said liability, the accused had issued Ext.P1 cheque dated 8.10.2007. The ## **`Crl.A NO. 1855 OF 2011 3`** cheque, on presentation to the bank for payment, got dishonoured due to ‘insufficiency of funds’ in the accused’s bank account. The complainant sent Ext.P4 statutory lawyer notice, claiming the demanded amount. Although the accused received the notice, he failed to pay the amount. Hence, the accused committed the above offence. 3. The learned Magistrate took cognizance of the offence. The accused denied the substance of accusation read over to him. In the trial, the complainant and a witness were examined as PWs 1 and 2 and Exts. P1 to P10 were marked in evidence. The accused denied the incriminating circumstances appearing against him in the evidence in the questioning under Section 313 of the Code of Criminal Procedure(‘Code’, for short). The accused did not let in any defence evidence. 4. The learned Magistrate, after analysing the materials placed on record, by the impugned judgment found the accused not guilty for the above offence and consequently acquitted the accused. ## **`Crl.A NO. 1855 OF 2011 4`** 5. It is assailing the said judgment, the present appeal is filed. 6. Heard; Sri. S.Prakash, the learned counsel appearing for the appellant and Smt.Seetha S., the learned Public Prosecutor appearing for the second respondent-State. Although the appeal was admitted as as on 31.10.2011 and service of notice was early complete on the first respondent, there is no appearance for him. Subsequently, the appeal was posted to 9.10.2023 and thereafter to 10.10.2023. Since, there was no presentation for the first respondent,this Court by order dated 10.10.2023 appointed Sri. Anantha Krishnan A Kartha as the Amicus Curiae following the law laid down by the Hon’ble Supreme Court in **Subedar v. State of Uttar Pradesh** ((2020) 17 SCC 765] to assist this Court in disposing of the appeal. Accordingly, the appeal was posted to today for disposal. 7. The point is whether there is any error or illegality in the judgment passed by the court below. 8. It is nigh-well settled in a host of judicial ## **`Crl.A NO. 1855 OF 2011 5`** pronouncements that the Appellate Court should be slow and circumspect in interfering with an order of acquittal. It is only when the conclusions arrived at by the Trial Court are patently wrong and manifestly erroneous that the Appellate Court should take a contrary view from that taken by the Trial Court. 9. Recently, in **Rupesh Manger (Thapa) v. State of Sikkim** [MANU/SC/1014/2023], the Honourable Supreme Court has held that the Appellate Court should reverse an order of acquittal only if it is so perverse and the conclusions are not plausible. Just because another view is possible, on the re-appreciation of evidence, the Appellate Court shall not disturb the findings of acquittal and substitute the findings of the Trial Court to convict the accused. 10. Keeping in mind the above principles, this Court proceeds to decide the appeal. 11. The complainant's case is that, the accused had borrowed an amount of Rs.1,50,000/- from him on 1.10.2007 and had issued Ext.P1 post dated cheque on ## **`Crl.A NO. 1855 OF 2011 6`** the very same day assuring to pay the amount on 8.10.2007. Subsequently, on the request made by the accused, the time period for repayment was extended till March,2008. But, the accused did not pay the amount. The complainant on presentation of the cheque to the bank for payment, the cheque got dishonoured due to insufficiency of funds in the bank account of the accused. Although a demand notice was sent, the accused failed to pay the said amount. The complainant examined himself as a witness and marked Exts.P1 to P10 documents in evidence. 12. On a scrutiny of the materials placed on record, it is seen that the accused has not sent any reply notice, although there is a contention seen taken in the impugned judgment. 13. However, in cross-examination of the complainant (PW1), the accused took a contention that other than for the signing (execution) of the cheque all the other entries on the cheque were not in his handwriting. He also raised a defence that the ## **`Crl.A NO. 1855 OF 2011 7`** complainant had earlier issued a demand notice to the brother of the accused named Dileep Kumar. Even though it was volunteered that the earlier demand notice would be produced, the same was not forthcoming. 14. The learned Magistrate, surprisingly, went on to hold that the burden of proof was entirely on the shoulder of the complainant, who had to prove the transaction beyond reasonable doubt and that the instant case was not fit one to draw the presumption under Section 139 of the Act. I am afraid that the findings arrived by the learned Magistrate is erroneous and unsustainable in law. 15. 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 accepted, indorsed, negotiated or transferred for consideration; ## **`Crl.A NO. 1855 OF 2011 8`** 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. 16. 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 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 ## **`Crl.A NO. 1855 OF 2011 9`** 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. (emphasis given) 17. 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 above legal position and doctrine of the reverse onus. It is ## **`Crl.A NO. 1855 OF 2011 10`** apposite to extract the relevant paragraphs, which declare 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, the 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).”** (emphasis supplied) 18. In **Bir Singh v Mukesh Kumar** [(2019) 1 KHC 774 SC] the Hon’ble Supreme Court has held that even if a signed blank cheque is voluntarily presented to a payee towards some payment and the payee fills up the amount and other particulars, the same does not invalidate the cheque. The onus of proof would be on the accused to prove that the cheque was not issued in discharge of a debt/liability by adducing a probable defence. 19. In the case at hand, indisputably, the accused ## **`Crl.A NO. 1855 OF 2011 11`** has not sent any reply notice to the demand notice issued by the complainant. 20. In **Rangappa** (supra), the Hon’ble Supreme Court has held that if the accused fails to send a reply notice to the statutory lawyer notice issued by the complainant under Section 138 of the Act, then an inference has to be drawn in favour of the complainant. 21. Here, the accused admits to have executed Ext.P1 cheque and handed over the same to the complainant. The complainant has established the concomitants constituting the ingredients prescribed under Section 138 of the Act. Therefore, the onus of proof to discharge the reverse onus shifted to the accused under Section 139 of the Act. The accused has not let in any evidence to rebut the reverse onus cast on him. Merely by cross examining the complainant and by denying all the incriminating circumstances put to him under Section 313 of the Code will not shift the reverse onus, unless he sets up a probable defence. 22. On a comprehensive re-appreciation of the ## **`Crl.A NO. 1855 OF 2011 12`** materials placed on record and the law on the point, I am of the definite view that the conclusion arrived at by the learned Magistrate is manifestly erroneous and wrong. Therefore, I am inclined to allow the appeal by setting set aside the impugned judgment and consequentially, convict and sentence the first respondent/accused for the offence under Section 138 of the Act. 23. In **Damodar S. Prabhu v. Sayed Babalal H** ((2010)5 SCC 663) the Hon'ble Supreme Court has observed that, unlike other forms of crime, a punishment for the offence under Section 138 of the N.I. Act is not a means for seeking retribution, but is a means to ensure payment of money. The complainant's interest lies primarily in recovering the money rather than seeing the drawer of the cheque getting incarcerated. While passing a sentence for an offence committed under the Act, it is a compensatory aspect of the remedy that has to be kept in mind and given priority over the punitive part. 24. In the above backdrop, I hold that the accused is to be sentenced to undergo imprisonment for one day (till ## **`Crl.A NO. 1855 OF 2011 13`** the rising of the court) and be ordered to pay fine and on realisation of the amount, the same to be paid to the complainant as compensation under Section 357(1)(b) of the Code, which will do complete justice. In the result, (i) The impugned judgment is set aside. (ii) The first respondent/accused in C.C.No246/2008 is convicted for an offence under Section 138 of the Act. (iii) The first respondent/accused is sentenced to undergo imprisonment for one day (till the rising of the court) and deposit an amount of Rs.1,70,000/- as fine before the court below within a period of sixty days from today, and in default to undergo simple imprisonment for a period of four months. (iv) If the fine amount is realised, the same shall be paid as compensation to the appellant/complainant under Section 357(1) (b) of the Code. (v) The first respondent/ accused is directed to appear before the learned Magistrate on 20.12.2023 to undergo the sentence and pay the fine amount. ## **`Crl.A NO. 1855 OF 2011 14`** (vi) In case of failure of the first respondent/accused to appear before the Trial Court, as ordered above, the learned Magistrate shall execute the sentence and recover the fine amount from the first respondent/accused, in accordance with law. (vii) The execution of the sentence shall stand deferred till 19.12.2023. (viii) This Court places on record its appreciation for the assistance rendered by the learned Amicus Curiae. (ix) The Registry is directed to forthwith forward a copy of this judgment to the Trial court for compliance. ## **SD/-** **C.S.DIAS, JUDGE** rmm20/10/2023