Allowed

Sanal Kumar, v. Sunil

Kerala HC5 Jun 2023CRL.A/1416/2018

Case brief

AI extract

What is this about?

In a criminal appeal against acquittal on Section 138 NI Act charges, the High Court held that voluntary issuance of a signed cheque attracts statutory presumptions. The court found the accused failed to provide cogent evidence to rebut the presumption that the cheque was issued to discharge a debt, thereby reversing the acquittal and convicting.

What did the court decide?

Accused convicted under Section 138 NI Act; sentenced to simple imprisonment till rising of court; fine of Rs 5,50,000; 5 months imprisonment for default.

Sanal Kumar, Vs Sunil — Cheque Dishonour | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MRS. JUSTICE MARY JOSEPH

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MONDAY, THE 5TH DAY OF JUNE 2023 / 15TH JYAISHTA, 1945

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CRL.A NO. 1416 OF 2018

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AGAINST THE JUDGMENT DATED 22.04.2017 IN S.T NO.210/2013 OF JUDICIAL FIRST CLASS

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MAGISTRATE-II, VAIKOM.

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APPELLANT/COMPLAINANT:

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SANAL KUMAR,
AGED 43 YEARS,
S/O.SREEDHARAN, MURIYATTU HOUSE,
KIZHAKKEKARA MURI, VADAYAR VILLAGE,
VAIKOM TALUK.

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BY ADVS.

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 BOBBYMATHEW KOOTHATTUKULAM
 SRI.P.M.NATESAN
 SMT.GIA MATHAI KANDATHIL
 SRI.A.U.HRISHIKESH
 SRI.G.DEVAPAL

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RESPONDENTS / ACCUSED AND STATE:

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1SUNIL,
AGED 44 YEARS,
S/O.RAJAPPAN, PAINAPPALIL HOUSE,
THALAYOLAPARAMBU KARA, VADAYAR VILLAGE,
VAIKOM TALUK.

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2STATE OF KERALA,
REPRESENTED BY THE PUBLIC PROSECUTOR,
HIGH COURT OF KERALA, ERNAKULAM.

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THIS CRIMINAL APPEAL HAVING COME UP FOR HEARING ON 05.06.2023, THE COURT

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ON THE SAME DAY DELIVERED THE FOLLOWING:

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CRL.A NO.1416/2018

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JUDGMENT

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Dated this the 05^th day of June, 2023.

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This appeal is directed against a judgment passed by Judicial First Class Magistrate Court-II, Vaikom (for short, ‘the trial court’ ) on 22.04.2017 in S.T No.210 of 2013. By the above judgment, the accused was acquitted by the trial court under Section 255(1) of the Code of Criminal Procedure, 1973 (for short, ‘the Cr.P.C’) for an offence under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘the N.I.Act’) allegedly committed by him.

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Aggrieved thereby, the complainant has approached this Court in the appeal on hand seeking for reversal of the order of acquittal. S.T No.210/2013 was a prosecution launched by the appellant under Section 138 N.I. Act based on a complaint filed under Section 142 of that Act.

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The averments of the complainant are to the following effect:-

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CRL.A NO.1416/2018

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The complainant and the accused were known to each other and a sum of 5,00,000/- was owed by the latter to the former. The latter drew and issued cheque bearing No.722783 from the account maintained by him with State Bank of India, Thalayolaparambu Branch for a sum of 5,00,000/- on 11.02.2013 to discharge the said liability to the former. The said cheque was sent for collection to the payee bank through Vaikom Urban Co-operative Bank, Thalayolaparambu, but was dishonoured and returned to him on 12.02.2013 for insufficiency of funds in the account maintained by the accused with the Bank, to honour it. A demand notice was issued by the complainant on 06.03.2013 to the accused intimating him the factum of dishonour of the cheque and demanding repayment of the amount covered by it within 15 days. The accused received the notice on 07.03.2013 but he did not repay the amount covered by the cheque within 15 days. Thus complaint was filed under Section 142 NI Act to launch the prosecution on hand.

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The accused entered appearance before Judicial First Class Magistrate Court-I, Vaikom on summons being served on him. All relevant documents proposed to be relied on by the complainant in the trial of the prosecution were served upon him. The particulars of the offence were read over and explained to him. He pleaded not guilty and claimed to face trial. Thus the trial was commenced against him.

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The complainant as well as his witness were examined respectively as PWs 1 and 2. Exts. P1 to P6 were also marked. Upon closure of the evidence of the complainant, the accused was questioned under Section 313 (1)(b) Cr.P.C with reference to the incriminating circumstances brought out in evidence by the complainant. The accused denied all those and an additional statement was filed.

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It was narrated in the additional statement that one Mr.Kakamathachan was a friend as well as business partner of the complainant. A sum of `20,000/- was borrowed by the accused from Kakamathachan in the year 2009, agreeing to

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repay it with interest at the rate of 8% per month. Signed cheques numbered as 722783 and 722784 drawn from State Bank of India, Thalayolaparambu Branch were also given to him by the accused. The accused repaid the entire amount and thus discharged the monetary liability to Mr.Kakamathachan but, the latter withheld the cheques given as security and absconded. Several complaints were lodged against him before Thalayolaparambu Police Station. It was revealed later that one of his creditors killed and buried him under a building near a church at Thalayolaparambu.

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It is further stated that the accused is a broker having dealings in properties as well as vehicles. One Mr. Mathew P. Jose and Mathew Varghese were known to him. 22 cents of immovable property belonging to Mr. Mathew P. Jose was entrusted to him for sale. An agreement for sale was executed between Mr. Jose Varghese and the complainant for sale of a property. Copy of the sale agreement is produced alongwith where the accused was a witness for the sale of property

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proposed by the agreement to be sold, which could not be effected and thereby the complainant sustained some loss. Thereupon, the complainant has compelled the accused to pay the loss sustained by him. He also insisted the accused to pay the entire compensation and obtained one of the two cheques given by him to Mr. Kakamathachan and misusing that, the prosecution in question was launched.

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According to him, amount shown in Ext.P1 was not due from him and Ext.P1 was fabricated by the complainant solely for launching the prosecution in question.

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Upon being convinced from the evidence that sufficient grounds are lacking to record an order of acquittal, the accused was called upon to enter on his defence. Two documents were marked from his side as Exts.D1 and D2. Entire evidence was appreciated by the trial court and it arrived at a finding that the complainant failed to establish the monetary liability of the accused to him and also the execution of Ext.P1 cheque towards discharge of that liability.

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The learned counsel for the complainant urged that the trial court went wrong in arriving at the finding as above. According to him, the finding of the trial court that adequate source of money was not there for the complainant to advance `5,00,000/- to the accused is totally devoid of any basis. According to him, the trial court is unjustified in finding fault with the complainant for non-production of receipts evidencing pledge of the gold ornaments to establish that the amount advanced to the accused was accumulated therefrom. According to him voluntary issuance of a cheque having been admitted by the accused , the trial court went wrong in taking a view that execution of Ext.P1 and it’s issuance to discharge a legally enforceable debt stood disproved. According to him such being the context, the trial court ought not to have taken a view based on the version of the accused that Ext.P1 given by him to Mr. Kakamathachan was misused by the complainant and filed the prosecution in question, especially when cogent evidence is not forthcoming from the accused to establish that. According

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to him since voluntary issuance of Ext.P1 was established from the evidence adduced by the complainant itself, the trial court ought to have taken a view that presumption under Section 139 NI Act is attracted in favour of the complainant and until it stood unrebutted by the defence that the complainant has successfully established his case. The learned counsel pointed out further that the accused did not care to mount the box to depose in accordance with the stand taken in the additional statement filed before the trial court under Section 313(5) Cr.P.C. According to him factums narrated in the additional statement of the accused suffer for inconsistencies and therefore, not liable to be relied on. According to him, the complainant admittedly was a broker and he is not entitled to realise the loss sustained by the proposed purchaser of the property.

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The learned counsel urged that the dictum in Divakaran K.K Vs. State of Kerala and Another [2016 (4) KLT 233] was relied on by the trial court to fortify that for

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failure of the complainant to narrate the entire particulars of the monetary transaction in the complaint filed by him to prosecute the accused for the offence. According to him the trial court is not justified in taking the above view on the basis of the dictum in Divakaran, since that has been declared as per incurium by a Division Bench of this Court in Basheer Vs. Usman Koya [2021 (2) KLT 567].

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Rasiya P. Vs. Abdul Nazer and Another [2022 KHC 6900] and Purnima Distributors, Ernakulam (M/s.) Vs. M.P.Thimmappa [2022 KHC 4413] were also relied on by the learned counsel. In Rasiya P. supra, common judgment passed by this Court in three revision petitions reversing the concurrent findings of guilt of the accused and consequent orders of conviction and sentence were reversed and the accused, acquitted for the reason that the nature of the monetary transaction involved and the source of fund to advance the amount, since not specifically stated in the complaint, came up for consideration of the Apex Court, and it

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held as follows:

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“ As per Section 139 of the N.I. Act, 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 discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the Complainant that the cheque was issued by the accused and the signature and the issuance of the cheque is not disputed by the accused, in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for any debt or other liability. The presumption under Section 139 of the N.I. Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the Complainant/holder of the cheque, in that case, it is for the accused to prove the contrary. The aforesaid has not been dealt with and considered by the High Court. The High Court has also failed to appreciate that the High Court was exercising the revisional jurisdiction and there were concurrent findings of fact recorded by the courts below.”

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Accordingly the Apex Court set aside the common judgment of this Court. It is indicated from the above discussion that a complaint filed to launch a prosecution under Section 138 N.I.Act would not be defeated for failure of the

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complainant to state the various aspects of the transaction and also about the source for him to advance the amount covered by the disputed cheque. It has been further held by the Apex Court in the case that in a prosecution of the nature, when the issuance of the disputed cheque in a signed form was proved by the complainant and those were not disputed by the accused, the initial burden can be taken to have been discharged by the complainant and the onus to prove the contrary that the cheque was issued to discharge a valid debt or liability towards the complainant is on the accused.

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The Apex Court has laid down the law in Bir Singh Vs. Mukesh Kumar [2019 (1) KHC 774 (SC)] on the following lines:

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“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 is otherwise valid, the penal provisions of S.138 would be attracted. 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

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cheque was not in discharge of a debt or liability by adducing evidence. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under S.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. The subsequent filling in of an unfilled signed cheque is not an alteration.”

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The Apex Court further held that the presumptions contemplated under Section 139 NI Act is a rebuttable one and the onus of proving that the cheque was not issued to discharge of any debt or other liability, is on the accused who has drawn and issued the cheque.

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In the case on hand, the complainant has categorically deposed as PW1 that Ext.P1 cheque was issued to him by the accused. Admittedly the cheque was drawn from an account maintained by him and issued in a signed form. The accused has no case that his signature was obtained in it or it was issued under any threat or coercion. He does not also project a claim that the unfilled signed cheque had been stolen by the complainant from him. When evidence is totally absent

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to establish any elements vitiating voluntariness in issuance of the cheque, the presumption under Section 139 N.I. Act would be attracted. In such circumstances, the complainant can be taken to have discharged the initial burden satisfactorily and then the presumption under Section 139 N I Act would operate in favour of the complainant that he as holder of the cheque has received it towards discharge of a debt in whole or in part due to him. The onus then would be shifted to the accused to establish on the contrary that the cheque was not issued towards discharge of any debt or other liability due to the complainant.

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The accused has taken a stand during his examination under Section 313(1)(b) Cr.P.C that Ext.P1 was a cheque issued by him to discharge a debt towards Mr.Kakamathachan, but that was retained by him despite discharge of the entire liability. He was alleged as missing thereafter. The complainant was alleged as a friend of him and the prosecution in question was launched by obtaining and

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misusing it. The accused did not mount the witness box to depose on the above aspects. The settlement deed and an agreement for sale were produced and marked in evidence as Exts.D1 and D2. But, those are highly insufficient even to draw that the case put forth by the accused is a probable one and to hold that he has discharged the onus to rebut the presumption attracted in the case, successfully.

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The evidence of the complainant is satisfactory and sufficient to hold that the accused has committed the offence punishable under Section 138 N.I Act. The trial court has not appreciated the evidence in its correct perspective and accordingly arrived at a totally erroneous finding that the accused is not guilty of the offence punishable under Section 138 N.I Act and acquitted him under Section 255(1) Cr.P.C for the offence under Section 138 N.I. Act. The judgment under challenge is only to be reversed.

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In the result, the appeal is allowed. The judgment under challenge is reversed. The accused is found guilty for the

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offence under Section 138 NI Act and is convicted and sentenced to undergo Simple Imprisonment till rising of the court and to pay a fine of `5,50,000/-. The accused shall also undergo simple imprisonment for a period of 5 months on default of payment of fine. The fine amount, on realisation shall also be disbursed to the complainant as compensation under Section 357(3) Cr.P.C.

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 Sd/-

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MARY JOSEPH

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JUDGE

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Sanal Kumar, v. Sunil

Case brief

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Sanal Kumar, v. Sunil

Case brief

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