High Court of Kerala dismissed a criminal revision petition challenging conviction for cheque dishonour under Section 138 NI Act. Bench held accused failed to rebut statutory presumption via insufficient cross-examination.
Revision petition dismissed, conviction and sentences confirmed, two months time granted for fine deposit.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.S.DIAS
MONDAY, THE 11TH DAY OF SEPTEMBER 2023 / 20TH BHADRA, 1945
CRL.REV.PET NO. 743 OF 2011
AGAINST THE JUDGMENT DATED 29.10.2010 OF THE ADDL. DISTRICT & SEESION
JUDGE (FAST TRACK COURT) NO.III PATHANAMTHITTA IN CRL.APPEAL NO.103/2009
AND AGAINST THE JUDGMENT IN ST NO.1144/2007 OF THE JUDICIAL FIRST CLASS
MAGISTRATE COURT-II, PATHANAMTHITTA
REVISION PETITIONER/APPELLANT/ACCUSED:
1RATHEESH
KANJIRATHETHIL HOUSE
ANTHYALANKAVU,KADAMMANITTA,
NARANGANAM,, PATHANAMTHITTA DISTRICT.
BY ADVS.
SRI.K.MADHUSOODHANAN NAIR
SRI.K.N.RADHAKRISHNANTHIRUVALLA
RESPONDENTS / COMPLAINANT/STATE:
1PATHANAMTHITTA DIST. CO-OP. BANK AND
HEAD OFFICE, PATHANAMTHITTA VILLAGE, KOZHENCHERRY,
KOZHENCHERRYTALUK,PATHANAMTHITTA DIST.,
THROUGH P/A, HOLDER K.C.PRABHAKARAN PILLAI, BR.MANAGER,
AYROOR.BR., R/AT PAVITHRAM, PARANTHAL MURI,
PANDALAMTHEKKERARA VILLAGE, ADOOR TALUK,
PATHANAMTHITTA DISTRICT.
2STATE OF KERALA
REPRESENTELD BY PUBLIC PROSECUTOR,
HIGH COURT OF KERALA.
BY ADVS.
SMT. SEETHA S., PP
SRI.JACOB P. ALEX,SC, PATHANAMTHITTA DIST.CO.OP.BANK LTD.
SRI.P.C.SASIDHARAN
THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON
11.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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C. S. DIAS, J.
Crl.R.P. No.743 of 2011
Dated this the 11th day of September, 2023
ORDE R
The revision petition is directed against the judgment of the Court of the Additional Sessions Judge (Adhoc) Fast Track Court-III, Pathanamthitta (Appellate Court) in Criminal Appeal No.103/2009, confirming the conviction and sentence in S.T. No.1144/2007 passed by the Court of the Judicial First Class Magistrate-II, Pathanamthitta (Trial Court). The revision petitioner was the accused and the first respondent was the complainant before the Trial Court.
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(i) The first respondent filed the complaint against the revision petitioner alleging him to have committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (in short, ‘N.I. Act’). The first respondent alleged that the revision petitioner had availed a loan from its Ayroor branch and defaulted in its repayment. In discharge of the liability, the first respondent issued Ext.P1 cheque, which on presentation for collection got dishonoured as per Ext.P2 memo for the reason of ‘insufficient funds’. Despite issuing Ext.P3 notice, the revision petitioner failed to pay the demanded amount. Hence, he committed the offence.
(ii) The Trial Court took cognizance of the offence and issued summons to the revision petitioner. On completion of the statutory formalities contemplated under the Code of Criminal Procedure (in short, ‘Cr.P.C.’), the
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complaint was posted for trial.
(iii) The power of attorney holder of the first
respondent was examined as PW1 and Exts.P1 to P6 were marked in evidence. The revision petitioner did not let in any evidence, but his statement was recorded under Section 313 Cr.P.C.
(iv) The Trial Court, after evaluating the evidence and materials on record, convicted and sentenced the revision petitioner to undergo simple imprisonment for a period of six months and pay a fine of Rs.1,07,930/- and in default to undergo simple imprisonment for a period of one month. And if the fine amount was realised, the same to be paid to the first respondent as compensation under Section 357 of the Cr.P.C.
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Appellate Court, after re-appreciating the materials on record, by the impugned judgment, confirmed the conviction, but modified the sentence to, till the rising of the court and directed the petitioner to remit a fine of Rs.1,07,930/- and in default to undergo simple imprisonment for a period one month, and further, if the fine was realised, the same to be paid to the first respondent as compensation.
learned counsel appearing for the revision petitioner, Sri.Jacob P. Alex, the learned counsel appearing for the first respondent and Smt.Seetha S., the learned Public Prosecutor for the second respondent-State.
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revision petitioner had specifically contended that he had not issued the cheque in favour of the first respondent. It is without the first respondent discharging the onus of proof the courts below have arrived at a conclusion that the petitioner is guilty for the offence punishable under Section 138 of the N.I. Act. He prayed that the impugned judgments may be set aside.
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pronouncements that the revisional power of this Court is to be sparingly exercised and is in the nature of a supervisory jurisdiction to correct the miscarriage of justice, if any found. The revisional power cannot be equated with Appellate/Second Appellate power. Even if a different view is possible, the revisional Court shall not substitute the view taken by the Trial/Appellate Court, unless and until there is a patent illegality, which is shocking to the conscience of the Court.
“14. In the case before us, the learned
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Magistrate went through the entire records of the case, not limiting to the report filed by the police and has passed a reasoned order holding that it is not a fit case to take cognizance for the purpose of issuing process to the appellant. Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is non-consideration of any relevant material or there is palpable misreading of records, the Revisional Court is not justified in setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional jurisdiction is to preserve the power in the court to do justice in accordance with the principles of criminal jurisprudence. The revisional power of the court under Sections 397 to 401 CrPC is not to be equated with that of an appeal. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the courts may not interfere with decision in exercise of their revisional jurisdiction.”
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case.
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petitioner in the vakalath and the Section 313 statement and held the signature was that of the revision petitioner. The Trial Court also held that as the revision petitioner had failed to issue a reply notice, the presumption under Sections 118 and Section 139 of the N.I. Act were against him. Consequently, the Trial Court found the revision petitioner guilty for the offence under Section 138 of the N.I. Act and convicted and sentenced
him to undergo simple imprisonment for a period of six months and pay a fine of Rs.1,07,930/- and
if the fine was realised, the same to be paid to the first respondent as compensation.
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sentence alone, and prayed that a lenient view
may be taken on the quantum of sentence.
appreciating the materials on record, particularly the oral testimony of PW1 and Exts.P1 to P6, held that the revision petitioner has not discharged the reverse onus laid down under Section 139 of the N.I. Act and, resultantly, confirmed the conviction, but modified the substantive sentence
by directing the revision petitioner to undergo simple imprisonment till the rising of the court and pay a fine of Rs.1,07,930 and if realised, the same to be paid to the first respondent.
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“ 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;
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.”
“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
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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 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
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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. Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the 'stop payment' instructions to his bank. Furthermore, the instructions to 'stop payment' had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to
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be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under S.138 of the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant - accused was not able to contest the existence of a legally enforceable debt or liability. The fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction - related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction - expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant.”
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“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).”
21. Similarly, in M/s.Shree Daneshwari
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Traders vs Sanjay Jain [2019 (4) KHC 495] , the Hon’ble Supreme Court has held as follows:
“16. Under Section 138 of the Negotiable Instruments Act, once the cheque is issued by the drawer, a presumption under Section 139 of the Negotiable Instruments Act in favour of the holder would be attracted. Section 139 creates a statutory presumption that a cheque received in the nature referred to under Section 138 of the Negotiable Instruments Act is for the discharge in whole or in part of any debt or other liability. The initial burden lies upon the complainant to prove the circumstances under which the cheque was issued in his favour and that the same was issued in discharge of a legally enforceable debt.
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the afore-cited decisions, especially the fact that the revision petitioner has not raised any of the contentions before the Appellate Court, I hold that the revision petitioner has not discharged onus of proof under Sections 118 and 139 of the N.I. Act. The mere cross-examination of PW1 will not suffice to discharge the statutory presumption under the Act. Thus, I conclude that there is no illegality, impropriety or irregularity in the conviction and sentence passed by the courts below in the impugned judgments.
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before the Trial Court. Hence, I find the
submission to be justifiable and reasonable.
(ii) The conviction imposed by the courts
below and the sentence imposed by the Appellate Court are confirmed;
(iii) Considering the request of the revision petitioner, two months’ time from today is granted to him, to deposit the fine amount;
(iv) Needless to mention, if the revision petitioner has deposited any amount towards the fine amount, only the balance amount need be deposited;
(v) The revision petitioner is directed to appear before the Trial Court on or before 11.11.2023, to undergo the modified sentence and to pay the fine amount;
(vi) In case of failure of the revision petitioner
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to appear before the Trial Court as ordered above, the Trial Court is directed to execute the sentence without fail, in accordance with law;
(vii) The execution of the sentence shall stand deferred till 11.11.2023;
(viii) The Registry is directed to forthwith forward a copy of this judgment with the lower court records to the Trial Court for compliance.
Sd/-
C. S. DIAS
JUDGE
SKP/11-09
3 issues framed by the court
Whether there is any illegality, impropriety or irregularity in the impugned judgments convicting the accused under Section 138 of the Negotiable Instruments Act.
Whether the accused discharged the onus of proof under Sections 118 and 139 to rebut the statutory presumption of consideration and debt.
Whether the revisional jurisdiction under Sections 397 to 401 Cr.P.C. was exercised correctly in confirming the conviction.
Colour shows how this judgement treated each authority
Sanjaysinh Ramrao Chavan vs Dattatray Gulabrao Phalke & AnrReferred¶51
[2015) 3 SCC 123] · Who else cites this
Rangappa vs. Sri.MohanReferred¶81
[2010 KHC 4325]
Kalamani Tex and Anr vs. P. BalasubramanianReferred¶94
[2021 (2) KHC 517]
M/s.Shree Daneshwari Traders vs Sanjay JainReferred¶99
[2019 (4) KHC 495]
4 provisions across 2 enactments
RATHEESH
PATHANAMTHITTA DIST. CO-OP. BANK AND HEAD OFFICE
STATE OF KERALA
C.S. DIAS
As recorded by the court registry
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