Dismissed

Baby P.M., v. Sudha Nandanan

Kerala HC14 Mar 2024CRL.A/223/2021

Case brief

AI extract

What is this about?

A complainant appealed against acquittal in a Section 138 NI Act cheque-dishonour case where he claimed Rs.10 lakhs was lent. The appellate court found he failed to establish the cheque's execution or his financial capacity, and upheld the trial court's acquittal.

What the court decided

AI extract

Baby P.M., Vs Sudha Nandanan — Cheque Dishonour | Kerala HC (2024)

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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 K. BABU

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THURSDAY, THE 14TH DAY OF MARCH 2024 / 24TH PHALGUNA, 1945

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CRL.A NO. 223 OF 2021

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AGAINST THE JUDGMENT DATED 01.02.2021 IN ST NO.5400 OF 2014
OF JUDICIAL MAGISTRATE OF FIRST CLASS I ,PERUMBAVOOR
APPELLANT/COMPLAINANT:

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BABY P.M.,
AGED 65 YEARS
S/O. MATHEW, PATHICKAL HOUSE, VENGOLA KARA,
VENGOLA VILLAGE, ALLAPRA P.O.
BY ADVS.
JOSHI N.THOMAS
SRI.C.PAULOSE

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RESPONDENTS/ACCUSED & STATE:

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1SUDHA NANDANAN AGED 48
W/O. NANDANAN, VAZHAYIL HOUSE,
PALACKATTUTHAZHAM BHAGAM, MARAMBILLY VILLAGE,
PALLIPRAM KARA, MUDICKAL P.O.
2THE STATE OF KERALA,
REPRESENTED BY THE PUBLIC PROSECUTOR,
HIGH COURT OF KERALA, KOCHI-682 031.
R1 BY ADVS.SRI.ANOOP.V.NAIR
SRI.RAMESH CHAND
SRI.DEVI.P
SRI.A.K.ANANDA KRISHNAN
R2 BY PP SRI.G.SUDHEER

¶10

THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON
14.03.2024, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:

Crl.A.No.223 of 2021

JUDGMENT

The challenge in this appeal is to the judgment dated 1.2.2021 passed by the Court of Judicial First Class Magistrate-I, Perumbavoor in S.T.No.5400 of 2014 acquitting the accused under Section 255(1) of the Code of Criminal Procedure. The complainant challenges the judgment acquitting the accused under Section 378 Cr.P.C.

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Prosecution Case:

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The complainant is conducting a provisional store at P.P. Road, Perumbavoor. The accused is also conducting a shop at P.P.Road. The accused borrowed an amount of Rs.10,00,000/- from the complainant in the year 2013 for expanding the business. When the complainant demanded back the amount the accused issued cheque bearing No.624307 drawn on the Indian Bank, Perumbavoor Branch from the account maintained by her. The complainant presented the cheque for collection. The cheque was dishonoured stating the reason insufficient funds in the account of the accused. The complainant

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Crl.A.No.223 of 2021

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caused to issue lawyer’s notice. The accused received the notice. She failed to repay the amount covered by the cheque even after receipt of the notice.

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The complainant filed a complaint alleging offence under Section 138 of the Negotiable Instruments Act before the trial Court. The Court took cognizance of the offence. On receipt of summons the accused appeared. The particulars of the offence were read over and explained to the accused to which she pleaded not guilty.

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The Court proceeded to take evidence. The complainant was examined as PW1. Exts.P1 to P4, P5 series, P6 series and P7 were marked.

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After the closure of the complainant’s evidence the accused was examined under Section 313 Cr.P.C. She denied all the incriminating circumstances appearing in evidence against her. Defence:

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There was no financial transaction between the complainant and the accused. The signature and writings on Ext.P1 cheque are not that of the accused. The complainant dishonestly obtained the cheque leaves kept in the shop in which the accused was working. The complainant fraudulently put the signature of the accused and presented the cheque in the Bank as per the instruction of one

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Crl.A.No.223 of 2021

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Latha. The accused had sent reply notice stating all these things. She filed a complaint before the Perumbavoor Police based on which FIR No.2672/2015 was registered. There is no valid consideration for the cheque. The complaint has been filed without any bonafides. The complainant never had the financial capacity to advance a sum of Rs.10 Lakhs as pleaded.

¶27

On the side of the defence, the accused gave evidence as DW1. Dr.Sojan Iype, Medical Superintendent and Head of the Department of Neurosurgery, M.O.S.C Medical College Hospital, Kolencherry was examined as DW2. Exts.D1 and D2 were marked.

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The complainant filed affidavit in lieu of Chief Examination from which it is evident that he was conducting a shop at P.P. Road. He stated that in 2013, the accused borrowed Rs.10 Lakhs from him for developing her business. The complainant testified that he is conducting a provisional store near Jyothi junction, Perumbavoor. While examined in cross PW1 stated that he was not an income tax payee at the time of the transaction. He further gave evidence that he was earning a sum of Rs.2000/- per day from his business and his monthly turn over was Rs.60,000/-. He deposed that at the relevant time he received a very little profit. He had no familiarity with Latha and Sara. The sum of Rs.10 Lakhs given to the accused was obtained

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by his wife being the consideration of a property which she acquired by way of family partition. The complainant was not aware of the year in which he gave money to the accused. He further stated that at the time of giving money the accused issued a cheque at her shop. He stated that entries in Ext.P1 cheque were filled by a person who was present in the shop. The accused signed the cheque in his presence. He did not know the person who entered the entries in Ext.P1.

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The accused gave evidence as DW1. She stated that she was working in the shop run by the complainant. It was a readymade cum tailoring shop. She was earning a salary of Rs.4000/- per month. Smt.Latha and Smt.Sara were also working in the shop. The accused had a joint account with her husband in the Federal Bank and a single account in the Indian Bank. She had collected cheque books from both the banks. She used to keep the cheque books in the shop itself as there was no safe facility at her house. She had lost six cheque leaves from the bag which was kept in the shop. When enquired, the complainant informed that he had taken the cheque leaves for using the same in the shop for the business purpose. Thereafter, she demanded return of the cheque leaves but, he did not return the same. A quarrel occurred between them. The complainant threatened her and closed the shutters of the shop keeping her inside. She cried loudly. Then a

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person who walked through the road opened the shop. She filed a complaint before the Perumbavoor Police. She is suffering from paralysis due to a stroke. She remained as inpatient from 22.2.2014 to 3.3.2014 in M.O.S.C. Medical College Hospital, Kolencherry. She was advised to take rest for a month. While she was taking rest, the complainant, Latha, Lissa, Sara and Santhosh came to her house and threatened her demanding money. She filed a complaint before the Superintendent of Police based on which Ext.D2 FIR was registered. She has not affixed her signature in Ext.P1 cheque.

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Dr.Sojan Iype, Medical Superintendent and Head of the Department of Neurosurgery, M.O.S.C. Medical College Hospital, Kolencherry gave evidence as DW2 that during 2014 he was working as the Head of the Department of Neurosurgery. He deposed that on 22.2.2014, one Sudhakumari, a woman aged 52 years, was admitted and treated in the hospital. DW2 stated that her right side remained paralyzed and she had no ability to speak. Sudhakumari was admitted there due to stroke. Ext.D1 series medical records were marked through DW2. As per Ext.D1 medical records, Sudhakumari/accused had `Zero’ movement ability. DW2 stated that even at the time of discharge on 3.3.2014 her movement ability was zero.

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Evidence of PW1 complainant is the solitary evidence to

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prove the execution of Ext.P1 cheque. In the chief examination, the complainant has given evidence that the accused borrowed the amount covered by the cheque in 2013 and thereafter Ext.P1 cheque was issued when he demanded repayment of the amount. In the cross examination, the complainant stated that he was not aware of the year in which the amount was given. He further stated that the accused gave the cheque when he paid the money to her. The accused challenged the financial capacity of the complainant to lend such a huge amount. Admittedly, the monthly turnover from the business run by the complainant at the relevant time was only Rs.60,000/-. Further, he admitted that he received only very small amount as profit. When asked about the source of money to lend such a huge amount, his case was that it was from his wife’s consideration out of a family partition. The accused had a consistent case that there was no transaction between the complainant and the accused. She had sent Ext.P7 reply stating her defence. The complainant failed to disclose the nature of the transaction between himself and the accused. He miserably failed to establish his source of income to hand over such an amount. It has come out in evidence that the accused was a staff in the shop run by the complainant. The reason for lending such a huge amount to his staff has not been explained by the complainant. Ext.D2 and the oral

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Crl.A.No.223 of 2021

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evidence of DW2 establish that the accused had ‘Zero’ mobility during 2014. The complainant has not given credible evidence regarding the nature of the transaction and the place where the money was handed over and even the date and year of the transaction. The complainant failed to establish the issuance of Ext.P1 cheque.

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The trial Court, after meticulously analysing the evidence of PW1, DW1 and DW2, recorded the finding that the complainant failed to prove execution of Ext.P1 cheque. The specific finding of the trial Court is that the case put forward by the complainant is part of a false story. The trial Court found the oral evidence of the complainant as not trustworthy.

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I have carefully gone through the oral evidence of the complainant, DW1 and DW2 and the documents placed before the Court. This Court is of the considered view that the complainant failed

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to discharge his initial burden in proving the execution of Ext.P1 cheque.

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The learned counsel for the appellant/complainant relied on Rajesh Jain v. Ajay Singh [2023 (6) KLT 209 (SC)] in support of his contention. In Rajesh Singh , the Supreme Court held that once the presumption under Section 139 is given effect to, the Courts ought

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Crl.A.No.223 of 2021

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to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt. In the present case, as the complainant failed to discharge the initial burden, the question of raising the presumption does not arise. The complainant has not established the issuance of the disputed cheque. The factual basis for raising the presumption has not been established by the complainant.

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When the complainant failed to discharge the initial burden to establish the execution of Ext.P1 cheque, the question of drawing presumption under Section 139 of the Negotiable Instruments Act does not arise.

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Even if it is assumed that the presumption under Section 139 of N.I. Act has been drawn in favour of the complainant, the evidence of the accused and DW2 corroborated by the reply notice, Ext.D1 series medical records and Ext.D2, copy of the FIR registered in Crime No.2672/2015 would lead to the conclusion that the accused could rebut the presumption drawn.

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A presumption is an inference as to the existence of a fact not actually known arising from its connection with another which is known. A presumption is a conclusion drawn from the proof of facts or circumstances and stands as establishing facts until overcome by contrary proof. Analysing the terms “proved” and “disproved” as

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provided in Section 3 of the Evidence Act, a court shall presume a Negotiable Instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. The necessary conclusion is that for rebutting such a presumption, what is needed is to raise a probable defence. All the circumstances, including the evidence adduced on behalf of the complainant, could be relied upon.

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In Hiten P. Balal v. Bratindranath Banerjee

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[(2001) 6 SCC 16] , a three-judge Bench of the Supreme Court, on the scope of Sections 138 and 139 of the Negotiable Instruments Act, held that the obligation of the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact. In Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [(1999) 3 SCC 35], while considering the presumption under Section 118(a) of the Negotiable Instruments Act, the Supreme Court held that the defendant can prove the non-existence of a consideration by raising a probable defence. The Supreme Court

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Crl.A.No.223 of 2021

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observed that if the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the complainant, who would be to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the Negotiable Instrument. The Supreme Court further observed that the burden upon the defendant of proving the nonexistence of the consideration can be either directly or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies.

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In Harbhajan Singh v. State of Punjab (AIR 1966

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SC 97) , the Supreme Court, while considering the nature and scope of onus of proof which the accused was required to discharge in a criminal case, held that the onus on an accused person might well be compared to the onus on a party in civil proceedings, and just as in civil proceedings the court trying an issue makes its decision by adopting the test of probabilities. In V. D. Jhingan v. State of Uttar Pradesh (AIR 1966 SC 1762), the Supreme Court held that it is well established that where the burden of an issue lies upon the accused, he is not required to discharge that burden by leading evidence to prove his case beyond a reasonable doubt. In Rajaram S/o.Sriramulu

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Naidu (Since Deceased) through L.Rs. v. Maruthachalam (Since Deceased) through L.Rs. (2023 LiveLaw (SC) 46), the Supreme Court held that the standard of proof for rebutting the presumption is that of preponderance of probabilities, and it is open for the accused to rely on the evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence.

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The principle that emerges from the above discussion is that the rebuttal does not have to be conclusively established, but such evidence must be adduced before the court in support of the defence that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of responsibility being that of the prudent man.

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In M.S.Narayana Menon v. State of Kerala [(2006)

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6 SCC 39), the Supreme Court has elaborately considered the question of the standard of proof for rebutting the mandatory presumption drawn under Section 139 of the Negotiable Instruments Act. In Narayana Menon , the Supreme Court held that if some material is brought on record consistent with the innocence of the accused, which may reasonably be true, even though it is not positively proved to be true, the accused would be entitled to acquittal. The Supreme Court

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further held that it is not necessary for the accused to disprove the existence of consideration by way of direct evidence and that the standard of proof evidently is preponderance of probabilities.

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If we proceed on the assumption that the complainant proved the execution of the cheque it is to be concluded that the accused could discharge her initial onus of proof showing that the existence of consideration was doubtful. The onus now shifted to the complainant, who is obliged to prove it as a matter of fact. In the present case, the complainant failed to prove the same. I am of the view that the accused could satisfy the court that there is a reasonable possibility of the non-existence of the consideration.

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The learned counsel for the accused further contended that the accused, having been acquitted by the trial Court, is entitled to the presumption of innocence and further that the accused, having secured his acquittal, the presumption of his innocence is further reaffirmed and strengthened by the trial Court. The learned counsel for the accused also submitted that if reasonable conclusions are possible based on the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial Court.

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Crl.A.No.223 of 2021

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The Apex Court in Chandrappa and others v. State of

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Karnataka [(2007) 4 SCC 415], following various authorities on the subject, deduced the general principles regarding the powers of the appellate Court while dealing with an appeal against an order of acquittal, as follows:-

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“(1) An appellate court has full power to review, re-appreciate and reconsider the evidence upon which the order of acquittal is founded.

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(2) The Code of Criminal Procedure, 1973 puts no limitation, restriction or condition on exercise of such power and an appellate court on the evidence before it may reach its own conclusion, both on questions of fact and of law.

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(3) Various expressions, such as, “substantial and compelling reasons”, “good and sufficient grounds”, “very strong circumstances”, “distorted conclusions”, “glaring mistakes”, etc, are not intended to curtail extensive powers of an appellate Court in an appeal against acquittal. Such phraseologies are more in the nature of “flourishes of language” to emphasis the reluctance of an appellate court to interfere with acquittal than to curtail the power of the Court to review the evidence and to come to its own conclusion.

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(4) An appellate court, however, must bear in mind that in case of acquittal, there is double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the Trial Court.

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(5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the Trial Court.”

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Crl.A.No.223 of 2021

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In the instant case, the complainant failed to give a satisfactory explanation for the suspicious circumstances brought out regarding the consideration of Ext.P1 cheque. The trial Court held that the burden is shifted to the complainant to prove that Ext.P1 cheque was issued in discharge of a legally enforceable debt and that the cheque was transferred for consideration. The trial Court held that the complainant could not prove that Ext.P1 cheque was issued in discharge of a legally enforceable debt. This view cannot be held to be illegal, improper or contrary to law. Therefore, I am of the considered view that the reasoning recorded by the trial Court for acquitting the accused was possible and plausible and no interference is required.

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For the above-mentioned reasons, the appeal lacks merit, and accordingly, it is dismissed.

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Sd/- K.BABU Judge

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TKS

Baby P.M., v. Sudha Nandanan

Case brief

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Baby P.M., v. Sudha Nandanan

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