Kerala High Court

Adline Pancy Vijayan vs Navas K.C on 23 October, 2024

Crl.R.P.No.466 of 2018                 1               2024:KER:79129

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                   PRESENT

              THE HONOURABLE MRS. JUSTICE M.B. SNEHALATHA

 WEDNESDAY, THE 23RD DAY OF OCTOBER 2024 / 1ST KARTHIKA, 1946

                         CRL.REV.PET NO. 466 OF 2018

      AGAINST JUDGMENT DATED 05.03.2018 IN CRL.A NO.24 OF
2016 OF ADDITIONAL SESSIONS COURT - II, KALPETTA ARISING OUT
OF THE JUDGMENT DATED 27.02.2016 IN CC NO.97 OF 2010 OF
JUDICIAL MAGISTRATE OF FIRST CLASS, KALPETTA
REVISION PETITIONER/APPELLANT/ACCUSED:

              ADLINE PANCY VIJAYAN
              AGED 61 YEARS, W/O.INNAS VIJAYAN, NELLISSERY HOUSE,
              NEAR RATION SHOP, EMILY, VYTHIRI TALUK, WAYANAD
              DISTRICT.

              BY ADVS.
              SRI.T.G.RAJENDRAN
              SMT.ANN SUSAN GEORGE
              SRI.T.R.TARIN
              SRI.V.A.VINOD
RESPONDENTS/COMPLAINANT & STATE:
    1     NAVAS K.C
          S/O.MUHAMMED, AGED 35 YEARS, KARUMANNIL HOUSE,
          MUNDERI, KALPETTA P.O., WAYANAD-673121.
    2     THE STATE OF KERALA
          REPRESENTED BY THE PUBLIC PROSECUTOR,
          HIGH COURT OF KERALA, ERNAKULAM-682031.
          BY ADV SRI.K.RAKESH
          MAYA M.N-PUBLIC PROSECUTOR
       THIS    CRIMINAL     REVISION   PETITION   HAVING   COME   UP   FOR
HEARING ON 25.9.2024, THE COURT ON 23.10.2024 DELIVERED THE
FOLLOWING:
 Crl.R.P.No.466 of 2018              2               2024:KER:79129


                                                              CR
                          M.B.SNEHALATHA, J
               -------------------------------------------
                         Crl.R.P.No.466 of 2018
                -------------------------------------------
            Dated this the 23rd day of October, 2024


                               ORDER

Revision Petitioner is the accused in C.C.No.97/2010 on the

files of Judicial First Class Magistrate Court, Kalpetta. She assails

the judgment in Crl.A.No.24/2016 of Sessions Court, Kalpetta by

which the Sessions Court confirmed the conviction and sentence

against her in C.C.No.97/2010 for the offence punishable under

Section 138 of Negotiable Instrument Act, 1881 (hereinafter

referred to as 'NI Act').

2. The parties shall be referred to as complainant and

accused.

3. The case of the complainant in brief is that accused

borrowed a sum of ₹5 lakhs from him in the 1 st week of November

2009, agreeing to repay the same within three months. When

demanded back the amount, accused issued Ext.P1 cheque for ₹5 Crl.R.P.No.466 of 2018 3 2024:KER:79129

lakhs drawn on State Bank of India, Kainatty Branch. Upon

presentation of Ext.P1 cheque, it was returned dishonoured due to

'insufficient funds' and also stating the reason 'drawers signature

incomplete'. In spite of receipt of notice dated 27.3.2010, accused

failed to pay the amount covered by the cheque. Accused thereby

committed the offence punishable under Section 138 of N.I Act.

4. Accused pleaded not guilty to the accusation and denied

the borrowal of any amount from the complainant and denied the

issuance of Ext.P1 cheque to the complainant in discharge of any

debt or liability.

5. Before the trial court, the complainant got himself

examined as PW1 and marked Exts.P1 to P5. On the side of the

accused, DW1 was examined and Exts.D1 to D6 were marked.

6. After trial, the learned Magistrate found the accused guilty

of the offence punishable under Section 138 N.I Act and she was

convicted and sentenced to undergo simple imprisonment for a

period of one year and to pay a fine of ₹5 lakhs with default

custodial sentence. It was further ordered that the fine amount, if

realised, shall be paid to the complainant as compensation. The

conviction and sentence was confirmed by the Sessions Court, Crl.R.P.No.466 of 2018 4 2024:KER:79129

Kalpetta in Crl.A.No.24/2016.

7. Assailing the said judgment of conviction and sentence

accused has preferred this revision contending that the trial court

and the appellate court miserably failed to appreciate the evidence

in its correct perspective; that the accused has not borrowed any

amount from the complainant and there was no legally enforceable

debt; that the trial court and the appellate court failed to take note

of the fact that O.S.No.180/2010 filed by the complainant against

the accused before the Sub Court, Sulthanbathery for realization of

the amount based on the very same cheque was dismissed by the

Sub Court, Sulthanbathery with a finding that there was no

financial transaction between the complainant and the accused and

the complainant had no financial capacity to lend such a huge

amount of ₹5 lakhs. It was further contended that the complainant

has not proved the execution of Ext.P1 cheque and therefore the

conviction and sentence against the accused are liable to be set

aside.

8. Per contra, the learned counsel for the complainant

contended that the execution of Ext.P1 cheque by the accused for a

legally enforceable debt stands proved and therefore there are no Crl.R.P.No.466 of 2018 5 2024:KER:79129

reasons at all to interfere with the impugned judgment.

9. The point for consideration is whether the impugned

judgment needs any interference by this Court.

10. The version of the complainant, who was examined as

PW1 is that in the 1st week of November 2009 accused approached

him for a loan of ₹5 lakhs, agreeing to repay the same within three

months and accordingly, he lent an amount of ₹5 lakhs to the

accused. After three months, when he demanded back the

amount, accused issued Ext.P1 cheque drawn on State Bank of

India, Kainatty Branch. Though he presented Ext.P1 cheque for

collection, it was returned dishonoured stating the reason 'funds

insufficient' and 'drawers signature incomplete'. Ext.P2 is the

memo received from the bank. Ext.P3 is the copy of the notice

sent to the accused intimating the factum of dishonour of the

cheque. Ext.P4 is the acknowledgment card. Ext.P5 is the reply

notice sent by the accused. According to PW1, the accused failed

to pay the amount covered by Ext.P1 cheque.

11. Accused, on the other hand, would contend that she has

no acquaintance with the complainant and has not borrowed any

amount from the complainant. Her specific case is that she had Crl.R.P.No.466 of 2018 6 2024:KER:79129

borrowed certain amounts from one Hari and Rajesh and while

borrowing the said amount, they had obtained two blank signed

cheque leaves from her as security for repayment of the loan and

Ext.P1 is one of such cheque leaf which was misused by the

complainant at the instance of said Hari and Rajesh.

12. In view of the rival contentions, let us see whether the

case of the complainant that the accused borrowed an amount of

₹5 lakhs from him in November 2009 and in discharge of the said

debt she issued Ext.P1 cheque to him stands proved or not?

13. The learned counsel for the complainant contended that

in view of the presumption under Sections 118(a) and 139 of

N.I.Act, this Court shall presume that there was consideration for

Ext.P1 cheque and further it is to be presumed that Ext.P1 cheque

was issued in discharge of a legally enforceable debt.

14. The learned counsel for the accused, on the other hand,

contended that the complainant failed to establish that the accused

borrowed an amount of ₹5 lakhs from him and failed to establish

that the accused issued Ext.P1 cheque to him in discharge of a

legally enforceable debt. The learned counsel pointed out that

based on the very same cheque, the complainant had filed a suit as Crl.R.P.No.466 of 2018 7 2024:KER:79129

O.S.No.180/2010 before the Sub Court, Sulthanbathery; that the

said suit was dismissed by the Sub Court with a finding that the

complainant herein failed to establish that the accused who was the

defendant in O.S.No.180/2010, borrowed ₹5 lakhs from him. It

was contended by the learned counsel for the accused that the

complainant who is an autorickshaw driver has had no financial

capacity to lend a huge sum of ₹5 lakhs and there is a finding to

that effect in the judgment in O.S.No.180/2010.

15. The learned counsel for the accused contended that

the finding of the civil court in O.S.No.180/2010 of Sub Court that

no amount was due from the accused to the complainant is binding

on the criminal court. In support of the said contention, he placed

reliance on the decision reported in Prem Raj vs. Poonamma

Menon and Ors. (MANU/SC/0257/2024).

16. It is a well settled principle that the standard of proof

for rebutting the presumption under Section 139 of N.I.Act is that

of the preponderance of probabilities and if the accused is able to

raise a probable defence which creates doubt about the existence

of a legally enforceable debt or liability, the prosecution under

Section 138 N.I.Act fails. The preponderance of probabilities can be Crl.R.P.No.466 of 2018 8 2024:KER:79129

drawn not only from the materials brought on record by the parties

but also by reference to the circumstances upon which he relies.

17. In Rangappa Vs. Mohan [2010(11)SCC 441], the Apex

Court held as follows:

"14..........Section 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 Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 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 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 Section 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."

18. In Krishna Janardhan Bhat Vs. Dattatraya G. Hegde

[2008(4) SCC 54] the Apex Court held as follows:

"34. We are not oblivious of the fact that Crl.R.P.No.466 of 2018 9 2024:KER:79129

the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This, however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same."

19. Thus, it is a settled position of law that the accused

can prove his defence by drawing inferences from the materials

already on record including the complainant's evidence,

circumstances of the case and also by leading his own evidence. If

the accused successfully creates doubts in the complainant's claim

about the existence of a legally enforceable debt, then the burden

of proof shifts back to the complainant who is required to prove the

guilt of the accused beyond reasonable doubt.

20. Ext.D6 is the judgment in O.S.No.180/2010 of Sub

Court, Sulthanbathery. It would show that the complainant herein

filed the said suit against the accused herein based on Ext.P1 Crl.R.P.No.466 of 2018 10 2024:KER:79129

cheque. In O.S.No.180/2010, the learned Sub Judge has rendered

a finding that the plaintiff in that suit who is the complainant herein

failed to establish his financial capacity to lend a huge sum of ₹5

lakhs to the defendant who is the accused herein. The learned Sub

Judge dismissed the suit with a finding that the

plaintiff/complainant failed to prove that the defendant/accused

herein borrowed ₹5 lakhs from him and issued the cheque which

was marked as Ext.A1 in the said suit in discharge of the debt and

therefore, the plaintiff/complainant herein is not entitled to get a

decree for realisation of money. It is an admitted case that the

complainant, who was the plaintiff in O.S.No.180/2010 who

suffered a decree of dismissal of O.S.No.180/2010, did not choose

to prefer any appeal from the said judgment and decree of

dismissal. Thus, the finding in O.S.No.180/2010 of Sub Court,

Sulthanbathery that the plaintiff/complainant herein failed to

establish that the defendant/accused borrowed ₹5 lakhs from him

and issued Ext.P1 cheque in discharge of the said debt has become

final. In Ext.D6 judgment, there is an observation that the

plaintiff/complainant herein even failed to identify the defendant/

accused before the said court. In the said circumstances, the Crl.R.P.No.466 of 2018 11 2024:KER:79129

defence canvassed by the accused that there was no transaction

between her and the complainant and the complainant is only a

name lender acting under the behest of one Hari and Rajesh as

contended by her assumes significance. It is also to be borne in

mind that even before presentation of Ext.P1 cheque by the

complainant for encashment, she had sent Ext.D1 notice to Hari

and Rajesh demanding return of signed blank cheque leaves and

stamp paper.

21. In Bharat Barrel and Drum Manufacturing

Company Vs. Amin Chand Payrelal [1999(3) SCC 35], the Apex

Court held thus:

"Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by consideration. Such a presumption is rebuttable. The defendant can prove the non- existence of consideration by raising a probable defence. 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 plaintiff who will be obliged 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 burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the Crl.R.P.No.466 of 2018 12 2024:KER:79129

defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as existence of negative evidence is neither possible nor contemplated and even if led is to be seen with a doubt......"

22. In Prem Raj's case (supra) the accused had

obtained a decree from a competent civil court in his favour

declaring that the cheque in question was issued as a security but

based on the dishonour of the said cheque, the complainant

initiated criminal prosecution against the accused and the accused

was convicted and sentenced for the offence under Section 138 N.I

Act by the trial court and the conviction and sentence was

confirmed by the Sessions Court and the High Court in appeal and

revision. But the Hon'ble Apex Court set aside the said conviction

and sentence by relying on the ratio in K.G. Premshanker vs.

Inspector of Police and Ors. (MANU/SC/0771/2002) and held as

follows:

"11. The position as per Premshanker (supra) is that sentence and damages would be excluded from the conflict of decisions in civil and criminal jurisdictions of the Courts. Therefore, in the present case, considering that the Court in criminal jurisdiction has imposed both sentence and damages, the ratio of the above-referred decision dictates Crl.R.P.No.466 of 2018 13 2024:KER:79129

that the Court in criminal jurisdiction would be bound by the civil Court having declared the cheque, the subject matter of dispute, to be only for the purposes of security.

12. In that view of the matter, the criminal proceedings resulting from the cheque being returned unrealised due to the closure of the account would be unsustainable in law and, therefore, are to be quashed and set aside."

23. In the case at hand, the accused has succeeded in

rebutting the presumption under Sections 118(a) and 139 of

N.I.Act. The complainant failed to establish that accused borrowed

a sum of ₹5 lakhs from him and issued Ext.P1 cheque to him in

discharge of any debt or liability. Hence, the conviction and

sentence against the accused for the offence under Section 138

N.I. Act is liable to be set aside.

In the result, this Criminal Revision petition stands allowed.

The conviction and sentence in C.C.No.97/2010 of Judicial First

Class Magistrate Court, Kalpetta and in Crl.A No.24/2016 of the

Sessions Court, Kalpetta stands set aside and the accused is

acquitted. Her bail bond stands discharged.