Kerala High Court

Jayakumar K.J vs George Thomas on 11 June, 2021

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
                 THE HONOURABLE MR. JUSTICE K.HARIPAL
        FRIDAY, THE 11TH DAY OF JUNE 2021 / 21ST JYAISHTA, 1943
                         CRL.A NO. 627 OF 2013
  AGAINST THE JUDGMENT IN C.C. No. 452/2012 ON THE FILES OF THE
COURT OF THE JUDICIAL MAGISTRATE OF FIRST CLASS -II, MUVATTUPZHA,
APPELLANT/COMPLAINANT:

            JAYAKUMAR K.J.
            S/O.JANARDHANAN,
            RESIDING AT KULANGARA MURIYIL HOUSE,
            NORTH PIRAMADOM P O,
            PAMPAKUDA

            BY ADVS.
            SRI.R.BINDU (SASTHAMANGALAM)
            SRI.PRASANTH M.P


RESPONDENTS/ACCUSED & STATE:

    1       GEORGE THOMAS
            S/O.THOMAS,VELUTHEDATHUPARAMBIL HOUSE,
            RAJAKKAD P O, PIN -

    2       STATE OF KERALA
            REP BY THE PUBLIC PROSECUTOR,
            HIGH COURT OF KERALA,ERNAKULAM,
            KOCHI-682031

            R1 BY ADV SRI.SABU FRANCIS
            R2 BY SRI. M.S. BREEZ, SENIOR PUBLIC PROSECUTOR
THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 09.04.2021,
THE COURT ON 11.06.2021 DELIVERED THE FOLLOWING:
 Crl.Appeal No. 627 of 2013           2



                                                               'C.R.'

                                JUDGMENT

The appellant is the complainant in a prosecution initiated

under Section 142 of the Negotiable Instruments Act, hereinafter

referred to as the Act, who suffered defeat from the trial court. His

grievance is that in spite of the fact that the first respondent/accused

did not even take care to cross examine the appellant, who was

examined as PW1, on the basis of a wrong interpretation adopted by

the learned Magistrate, he suffered the case.

2. The complaint was instituted on 25.05.2012 following the

statutory time table, alleging that the accused/first respondent had

borrowed from him an amount of Rs.2,50,000/-, that for discharging

the liability, he issued cheque for the amount bearing No. 050666

dated 03.04.2010 drawn on Muvattupuzha branch of the Bank of

India. When the cheque was presented for encashment through the

Pampakuda branch of the Ernakulam District Co-operative bank, it

returned dishonoured due to insufficiency of funds; he got back the

cheque on 13.04.2010. On 16.04.2010, he caused to issue a lawyer

notice demanding the amount; but the amount was not paid. Instead,

the accused sent a reply denying liability and narrating a false story,

that made him to approach the trial court.

3. On appearance and when particulars of offence were read

over and explained, the first respondent pleaded not guilty. Thereafter,

the appellant/complainant gave evidence as PW1 and Exts.P1 to P6

were marked. The first respondent was defended by a counsel of his

choice. Still, for reasons best known to him, PW1 was not cross

examined. Thereafter, the first respondent was examined under

Section 313(1)(b) of the Code of Criminal Procedure, hereinafter

referred to as the Cr.P.C.; he denied the incriminating circumstances

and maintained that he had agreed to pay Rs.50,000/-, which alone

was borrowed, with interest, within one month. There was no

evidence in defence. After hearing counsel on both sides, by the

impugned judgment, the learned Magistrate disbelieved the version of

the appellant and gave a verdict acquitting the first respondent under

Section 255(1) of the Cr.P.C. That finding is now called in question

under Section 378(4) of the Cr. P.C., after obtaining leave.

4. I heard learned counsel on both sides. The learned counsel

for the appellant submitted that the reasons stated by the learned

Magistrate for acquitting the first respondent are erroneous and illegal.

The first respondent had not raised serious dispute with regard to the

Ext.P1 cheque. Still, basing on the version given at the time of

examination under Section 313(1)(b) of the Cr.P.C., the complaint was

dismissed. So the learned counsel prayed for reversing the finding.

He also relied on the decision reported in Basheer v. Usman Koya

[2021 (2) KLT 567].

5. On the other hand, the learned counsel for the first

respondent defended the judgment of the trial court. According to him,

execution of the cheque is not proved, merely by admitting signature

on the document, no adverse inference can be drawn against the first

respondent. Regarding the absence of details in the complaint also, he

said, it is fatal for which he placed reliance on the decision in Vijay v.

Laxman and Another [ 2013(3) SCC 86].

6. After considering the materials on record, I am afraid, the

learned Magistrate was completely mis-guided by the first respondent

and such a finding cannot stand judicial scrutiny. It is true that the

complaint does not contain details as to when the amount was lent, the

time and place of the transaction, the conditions under which such an

amount was paid, the previous relationship between the complainant

and the accused etc. But in a prosecution under Section 142 of the

Act, alleging offence punishable under Section 138, it is the consistent

stand of the courts that such materials are not warranted, either in the

complaint or in the notice. The most vital aspect in such a prosecution

is whether, the subject cheque was executed and issued by the

accused. If that part of the case of the prosecution is proved, that

would automatically attract the presumptions under Sections 118 and

139 of the Act. Then the ball will pass to the court of the accused and

if he does not discharge the burden, the Court will be entitled to draw

the presumptions against him. In other words, it would be presumed

that the cheque is supported by consideration and is issued in

discharge of a legally enforceable liability.

7. As noticed earlier, PW1/the appellant was not cross

examined by the counsel for the first respondent. All the incriminating

materials were then put to the first respondent under Section 313 of

the Cr.P.C. When a question was put about the Ext.P1 cheque bearing

Rs.2,50,000, he denied the same. The next question was regarding

the presentation of the cheque and that it was returned dishonoured,

the first respondent replied that he had given a blank cheque. He also

admitted the receipt of the notice. To the next question, he said that he

had agreed to pay a sum of Rs.50,000/- with interest and that he had

borrowed only Rs.50,000/-. He also replied that he has no evidence to

adduce on his side. It is based on this evidence that the trial court

proceeded to acquit the first respondent. According to the learned

Magistrate, there is no mention in the complaint about the original

transaction, that in the chief affidavit nothing has been stated about the

original transaction by which the liability of the accused had arisen.

Similarly, it was observed that the date, time and place of execution of

cheque are also not mentioned. On that basis, the Magistrate

concluded that the statement of PW1 does not inspire confidence. It

has also been stated that mere signature of the accused on the cheque

would not prove execution and that there is no evidence of any strong

bond of friendship or relationship for parting with such a 'magnum

amount'. On that basis, the first respondent was acquitted.

8. As mentioned earlier, absence of details of the transaction

in the complaint or in the notice cannot be highlighted as a big issue to

throw the complaint overboard. The appellant has stated that the first

respondent had borrowed an amount of Rs.2,50,000/- from him,

towards discharge of the same, the cheque was issued. It is not

understood as to how the learned Magistrate could jump into such

conclusions, especially when the first respondent had chosen not to

cross examine the complainant.

9. Even otherwise, the accused cannot insist to give entire

details of the transaction leading to the issuance of the cheque, either

in the complaint or in the notice. Such details need be stated only if

the complainant is falling back on the original transaction. A

complaint alleging offence under Section 138 of the Act need not be

based on the original transaction. When a similar plea was taken, this

Court held in Joseph Jose v J Baby and others [2002 (2) KLJ 332]

that there is absolutely no justification for discarding the

complainant's case on the ground of improbability of the original

transaction or want of pleading in that regard.

10. In Uttam Ram v Devinder Singh Hudan and another

[ 2019 (10) SCC 287] the Hon'ble Supreme Court held thus:-

"The Trial Court and the High Court proceeded as if, the appellant is to

prove a debt before Civil Court wherein, the plaintiff is required to prove his

claim on the basis of evidence to be laid in support of his claim for recovery

of the amount due. A dishonour of cheque carries a statutory presumption of

consideration. The holder of cheque in due course is required to prove that

the cheque was issued by the accused and that when the same presented, it

was not honoured. Since there is statutory presumption of consideration, the

burden is on the accused to rebut the presumption that the cheque was

issued not for any debt or other liability."

The Supreme Court also reminded that there is the mandate of

presumption of consideration in terms of the provisions of the Act; the

onus shifts to the accused on proof of issuance of the cheque to rebut

the presumption that the cheque was issued not for discharge of any

debt or liability.

11. The apex court in M/s. Kumar Exports v. M/s. Sharma

Carpets [AIR 2009 SC 1518] has given a vivid picture of

presumption in favour of a holder of cheque, shifting the onus etc.,

thus:

"9. In order to determine the question whether offence punishable under

Section 138 of the Act is made out against the appellant, it will be necessary

to examine the scope and ambit of presumptions to be raised as envisaged

by the provisions of Sections 118 and 139 of the Act. In a suit to enforce a

simple contract, the plaintiff has to aver in his pleading that it was made for

good consideration and must substantiate it by evidence. But to this rule,

the negotiable instruments are an exception. In a significant departure from

the general rule applicable to contracts, Section 118 of the Act provides

certain presumptions to be raised. This Section lays down some special

rules of evidence relating to presumptions. The reason for these

presumptions is that, negotiable instrument passes from hand to hand on

endorsement and it would make trading very difficult and negotiability of

the instrument impossible, unless certain presumptions are made. The

presumption, therefore, is a matter of principle to facilitate negotiability as

well as trade. Section 118 of the Act provides presumptions to be raised

until the contrary is proved (i) as to consideration, (ii) as to date of

instrument, (iii) as to time of acceptance, (iv) as to time of transfer, (v) as to

order of indorsements, (vi) as to appropriate stamp and (vii) as to holder

being a holder in due course. Section 139 of the Act provides that 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. Presumptions are devises by

use of which the courts are enabled and entitled to pronounce on an issue

notwithstanding that there is no evidence or insufficient evidence. Under the

Indian Evidence Act all presumptions must come under one or the other

class of the three classes mentioned in the Act, namely, (1) "may presume"

(rebuttable), (2) "shall presume" (rebuttable) and (3) "conclusive

presumptions" (irrebuttable). The term 'presumption' is used to designate an

inference, affirmative or disaffirmative of the existence a fact, conveniently

called the "presumed fact" drawn by a judicial tribunal, by a process of

probable reasoning from some matter of fact, either judicially noticed or

admitted or established by legal evidence to the satisfaction of the tribunal.

Presumption literally means "taking as true without examination or proof".

Section 4 of the Evidence Act inter alia defines the words 'may presume' and

'shall presume' as follows:-

"(a) 'may presume' - Whenever it is provided by this Act that the

Court may presume a fact, it may either regard such fact as proved, unless

and until it is disproved or may call for proof of it.

(b) ' shall presume' - Whenever it is directed by this Act that the

Court shall presume a fact, it shall regard such fact as proved, unless and

until it is disproved."

In the former cases the Court has an option to raise the presumption

or not, but in the latter case, the Court must necessarily raise the

presumption. If in a case the court has an option to raise the presumption

and raises the presumption, the distinction between the two categories of

presumptions ceases and the fact is presumed, unless and until it is

disproved.

10. Section 118 of the Act inter alia directs that it shall be

presumed, until the contrary is proved, that every negotiable instrument was

made or drawn for consideration. Section 139 of the Act stipulates that

unless the contrary is proved, it shall be presumed, that the holder of the

cheque received the cheque, for the discharge of, whole or part of any debt

or liability. Applying the definition of the word `proved' in Section 3 of

the Evidence Act to the provisions of Sections 118 and 139 of the Act, it

becomes evident that in a trial under Section 138 of the Act a presumption

will have to be made that every negotiable instrument was made or drawn

for consideration and that it was executed for discharge of debt or liability

once the execution of negotiable instrument is either proved or admitted. As

soon as the complainant discharges the burden to prove that the instrument,

say a note, was executed by the accused, the rules of presumptions

under Sections 118 and 139 of the Act help him shift the burden on the

accused. The presumptions will live, exist and survive and shall end only

when the contrary is proved by the accused, that is, the cheque was not

issued for consideration and in discharge of any debt or liability. A

presumption is not in itself evidence, but only makes a prima facie case for a

party for whose benefit it exists."

12. Secondly, the first respondent has not put forward any case

at all, stating under what circumstance the cheque happened to be

issued. He has merely stated that a signed blank cheque was given.

Even the reply notice was not admitted in evidence, so that we are not

in a position to gather what precisely is the version of the first

respondent, regarding the transaction, which was given at the earliest

possible opportunity afforded to him.

13. Moreover, the learned Magistrate was carried away by a

statement given by the first respondent under Section 313 of the

Cr.P.C. Of course examination of an accused under Section 313 of the

Cr.P.C., not only provides an opportunity to explain the incriminating

pieces of evidence appearing against him and also permits him to put

forward his own version with regard to the circumstances in which he

was dragged to a criminal proceedings. Here, before the trial court,

there is the evidence tendered by the appellant as PW1 which is a

statement given under oath, pitted against the statement of the first

respondent under Section 313(1)(b) of the Cr.P.C. It is the settled

proposition of law that statement given under Section 313 of the

Cr.P.C cannot be treated as a substantive piece of evidence. Similarly,

testimony given on oath by a witness cannot be rejected merely on the

ground that it was contradicted by the statement of the accused made

under Section 313 of the Cr.P.C.

14. The answers given by the accused in reply to questions

under Section 313 of the Cr.P.C., are not per se evidence; they are not

on oath; the prosecution does not get opportunity to verify the

correctness of such statements, unless the accused takes oath and

enters the box under Section 315 of the Cr.P.C., they do not get

opportunity to cross examine. Here the counsel for the first respondent

did not cross examine the appellant, when he took oath and gave

evidence as PW1. Secondly, no evidence is tendered by the first

respondent in support of his version that the cheque was given only in

consideration of Rs.50,000/-.

15. Worsening the case of the first respondent, when examined

under Section 313 of the Cr.P.C., the respondent admitted having

issued the cheque in a signed blank form. Even in such a situation, the

liability under Section 138 of the N.I.Act cannot escape him. In Bir

Sing v. Mukesh Kumar [AIR 2019 SC 2446], the Hon'ble Supreme

Court has held as follows:-

"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, S. 20, S.87 and S.139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. 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.

38. 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 cheque was not in discharge of a debt or liability by adducing evidence."

16. This decision has been followed and reiterated in

Kalamani Tex and Another v. Balasubramanian P. [ILR 2021 (1)

Kerala 855], where it is held that even if the argument that only a

blank cheque was issued on its face value, still the statutory

presumptions under Sections 118 and 139 of the N.I. Act cannot be

obliterated.

17. In my assessment, in this setting, the learned Magistrate

has gone estray in acquitting the first respondent. Having regard to the

circumstances he should not have been acquitted. After having

admitted that the Ext.P1 cheque was issued by him, in the absence of a

plausible and satisfactory explanation, the trial court ought to have

drawn the presumptions under Sections 118 and 139 of the Act. The