Allowed

M/S. Ronnie Associates v. the State of Kerala

Kerala HC9 Aug 2021CRL.A/134/2016

Case brief

AI extract

What is this about?

High Court allowed criminal appeals against acquittal in cheque bouncing cases. Bench held lower court erred by assuming presumption under Section 139 NI Act without proving due execution of cheque. Matter remanded to magistrate for fresh disposal.

What did the court decide?

Judgment of conviction set aside; matter remanded to trial court for proper disposal in accordance with law.

M/S. Ronnie Associates Vs the State of Kerala — Cheque Dishonour | Kerala HC (2021)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE P.SOMARAJAN

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MONDAY, THE 9^TH DAY OF AUGUST 2021 / 18TH SRAVANA, 1943

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CRL.A NO. 133 OF 2016 (D)

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ST 870/2011 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (E&O), ERNAKULAM

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APPELLANT/COMPLAINANT

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M/S.RONNIE ASSOCIATES, XL1/2415, KALABHAVAN ROAD, ERNAKULAM NORTH, KOCHI - 18, REPRESENTED BY ITS PROPRIETOR, MR.JESTIN, S/o LATE A.R.JOSEPH, XL1/2415, KALABHAVAN ROAD, KOCHI - 18. BY ADVS. SRI.S.SHANAVAS KHAN SMT.S.INDU

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RESPONDENTS/STATE/ACCUSED:

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1 STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.

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2 SMT.ANITHA R, PROPRIETRIX, AGED 49 YEARS, W/o RAMESH, SUPER TRADE LINKS, 43/1246-1, KALAYATH LANE, NEAR PACHALAM MARKET, KOCHI - 12.

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R2 BY ADVS.SRI.S.B.PREMACHANDRA PRABHU

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SRI.K.B.RAJESH

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R1 BY PUBLIC PROSECUTOR SRI. NOUSHAD K.A.

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THIS CRIMINAL APPEAL HAVING COME UP FOR ORDERS ON 09.08.2021 ALONG WITH CRL.A. No.134/2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Crl.Appeal Nos.133 & 134 of 2016

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE P.SOMARAJAN

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MONDAY, THE 9^th DAY OF AUGUST 2021 / 18TH SRAVANA, 1943

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CRL.A NO. 134 OF 2016

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ST 873/2011 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (E&O), ERNAKULAM

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APPELLANT/COMPLAINANT:

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M/S. RONNIE ASSOCIATES, XLI/2415, KALABHAVAN ROAD, ERNAKULAM NORTH, KOCHI-18, REPRESENTED BY ITS PROPRIETOR MR.JESTIN, AGED 42, S/O.LATE A.R.JOSEPH, XLI/2415, KALABHAVAN ROAD, KOCHI-18.

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BY ADVS. SRI.S.SHANAVAS KHAN

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SMT.S.INDU

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RESPONDENTS/ACCUSED & STATE:

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1 THE STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.

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2 SMT.ANITHA R, PROPRIETRIX, AGED 49 YEARS, W/o RAMESH,, SUPER TRADE LINKS, 43/1246-1, KALAYATH LANE, NEAR PACHALAM MARKET, KOCHI-12.

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BY ADV SRI.S.B.PREMACHANDRA PRABHU BY PUBLIC PROSECUTOR SMT. S.SEETHA

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THIS CRIMINAL APPEAL HAVING COME UP FOR ORDERS ON 09.08.2021 ALONG WITH CRL.A.No.133/2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Crl.Appeal Nos.133 & 134 of 2016

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JUDGMENT

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These are the two appeals preferred against the respective judgment of acquittal by way of a common judgment rendered by the Additional Chief Judicial Magistrate, Ernakulam. Paragraph 11 of the said judgment is extracted below for reference.

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“11. Ext.P1 cheque is for more than Rs.70,000/-. The business transaction between accused and complainant was only for the period from September to December 2010. When the accused has specifically disputed the liability and pointed out want of consideration claiming that Ext.P1 is a cheque created using a signed blank cheque 1 given as security the complainant was bound to bring on record the documents in their possession to prove delivery of the materials to the accused for proving consideration. In Ext.D6 reply the accused had specifically 2 stated that Ext.P1 cheque was given in blank as security and Ext.P7 cheque and another cheque for Rs.20,000/- was given by the accused on condition of returning Ext.P1 cheque. 3 In the existing circumstances the complainant had a duty to prove consideration for Ext.P1

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Crl.Appeal Nos.133 & 134 of 2016

cheque so that court could have believed the case of execution of Ext.P1 cheque by the accused. The presumption U/s 139 arises only on proof of execution. Mere admission of signature on a signed blank cheque does not amount to admission of execution. The failure of the complainant to produce documents to prove consideration goes a long way of disproving the case of execution of Ext.P1 cheque. It is settled that the presumption U/s 139 of Negotiable Instruments Act can be rebutted by drawing adverse inference u/s 114 of the Evidence Act. Even if a presumption is drawn U/s 139 of Negotiable Instruments Act as regards Ext.P1 cheque the same will stand rebutted by the failure of the complainant to produce the materials in their possession to prove consideration. The complainant is not an ordinary individual. It is a distributor of the company maintaining documents to prove receipt of goods and also documents to prove delivery of goods. In Kumar Exports v. Sharma AIR 2009 SC 1518 it was held that the presumption under S.19 of Negotiable Instruments Act can be rebutted by an adverse inference under s.114 of Evidence Act. On the failure of complainant to produce relevant documents in their possession an adverse inference is to be taken that the documents if produced will be adverse to him. In

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Crl.Appeal Nos.133 & 134 of 2016 5

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the circumstances of the case complainant has failed to prove execution of Ext.P1 cheque. He has failed to prove that the accused had issued Ext.P1 cheque for payment of the amount owned by the accused to the complainant. The presumption u/s 139 of the Negotiable Instruments Act is not available to the complainant as execution of the 8 cheque is not proved. Even if execution is deemed as proved the presumption u/s 138 of Negotiable Instruments Act will stand rebutted by adverse inference u/s 114 of the Evidence Act. Points 1 to 3 are answered accordingly.”

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(emphasis 1 to 8 supplied)

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What is revealed from the abovesaid discussion is

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that the learned Magistrate has totally failed to

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appreciate what actually amounts to “due execution” of a cheque, which is evident from emphasis No.1 to 4 above. It is so unfortunate that even he did not understand what actually amounts to “admission of execution” of a cheque and the admitted case of issuance of signed cheque by way of security, which is well evident from emphasis No.2 and

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Emphasis No.3 would show that it amounts to “putting the horse before cart”. It is the execution of the

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Crl.Appeal Nos.133 & 134 of 2016 6

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cheque, which has to be considered at first so as to draw

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the presumption for consideration either under Section 118 or 139 of the Negotiable Instruments Act and not vice versa. The basic principle of presumption which can be drawn under Section 139 of the N.I.Act has not been properly understood by the learned Magistrate, which is clear from emphasis No.5 above. It is also not clear

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under what circumstance the trial court observed that “the complainant is not an ordinary individual” (Emphasis No.6). Emphasis No.7 would also reveal that the learned Magistrate has no idea about the circumstances under which an 'adverse inference' can be drawn. Emphasis No.8 seems

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to be so strange. I am at a loss to understand what actually intended by the Magistrate by the expression “execution is deemed as proved” and it will sufficiently

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tell upon the approach of the learned Magistrate overlooking all settled legal principles. The judgment is so shabby and unsustainable.

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The judgment of conviction and sentence is liable to

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be set aside and the matter is remanded back to the trial

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Crl.Appeal Nos.133 & 134 of 2016 7

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court for proper disposal in accordance with law. The parties shall appear before the trial court on 09/09/2021. Both the appeals are allowed in part accordingly.

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Registry is directed to send a copy of this judgment to the officer concerned, besides a copy to the Administrative Committee of High Court and the Training Directorate

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attached to the High Court so as to alert the officer properly.

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Sd/-

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P.SOMARAJAN JUDGE

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DMR/-

M/S. Ronnie Associates v. the State of Kerala

Case brief

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M/S. Ronnie Associates v. the State of Kerala

Case brief

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