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Kerala High Court
Sree Gokulam Chit And Finance Co. Pvt vs Anu Thomas And Another on 16 December, 2025
Crl. Appeal No. 787/2008 1
2025:KER:96683
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE JOHNSON JOHN
TUESDAY, THE 16TH DAY OF DECEMBER 2025 / 25TH AGRAHAYANA, 1947
CRL.A NO. 787 OF 2008
JUDGMENT DATED 21.05.2007 IN Crl.A NO.71 OF 2007 OF ADDITIONAL
DISTRICT & SESSIONS COURT (ADHOC)-II, THODUPUZHA
C.C. NO. 723 OF 2006 OF JUDICIAL MAGISTRATE OF FIRST CLASS-I,
THODUPUZHA
APPELLANT/COMPLAINANT:
SREE GOKULAM CHIT AND FINANCE CO. (P) LTD., 356, ARCOT ROAD,
KODAMBAKKOM, CHENNAI, REPRESENTED BY THE POWER OF
ATTORNEY HOLDER, MR.A.V.SANTHOSH, S/O.VIJAYA BHANU,
ASSISTANT BUSINESS MANAGER, THODUPUZHA BRANCH.
BY ADVS.
SRI.P.VIJAYA BHANU (SR.)
SRI.P.M.RAFIQ
RESPONDENTS/ACCUSED AND STATE:
1 ANU THOMAS, W/O. THOMAS VARGHESE,
CHEMPARATHICKAL HOUSE, MUTHALAKODAM,, THODUPUZHA.
2 STATE OF KERALA REPRESENTED BY
PUBLIC PROSECUTOR, HIGH COURT OF KERALA,, ERNAKULAM.
R1 BY ADV SHRI.T.J.MICHAEL
R2 BY SRI. ALEX M. THOMBRA, SR. PUBLIC PROSECUTOR
THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 15.12.2025, THE
COURT ON 16.12.2025 DELIVERED THE FOLLOWING:
Crl. Appeal No. 787/2008 2
2025:KER:96683
JOHNSON JOHN, J.
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Crl. Appeal No. 787 of 2008
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Dated this the 16th day of December, 2025
JUDGMENT
This appeal by the complainant is against the acquittal of the
accused under Section 138 of the Negotiable Instruments Act, 1881 ('N.I
Act' for short).
2. As per the complaint, the husband of the accused subscribed
two chitties conducted by the Thodupuzha Branch of the complainant
company and the accused was the guarantor in both the chitties. The
subscriber committed default in payment of the instalments and after
issuance of notice to the subscriber and the guarantor, the accused
issued cheque dated 21.07.2005 for Rs.2,10,279/- to the complainant
company in discharge of the liability.
3. When the complainant company presented the cheque for
collection, the same was dishonoured due to insufficiency of funds in the
account of the accused and in spite of issuance of statutory notice, the
accused failed to pay the cheque amount to the complainant.
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4. Before the trial court, PWs 1 and 2 were examined and Exhibits
P1 to P11 were marked from the side of the complainant and from the
side of the accused, DWs 1 and 2 were examined and Exhibits D1 to D4
were marked.
5. After analyzing the evidence, the trial court found the accused
guilty of the offence under Section 138 of the N.I. Act and sentenced to
undergo simple imprisonment for one year and to pay compensation of
Rs.2,10,279/- to the complainant under Section 357(3) of Cr.P.C. and in
default of payment of compensation, to undergo simple imprisonment
for three months.
6. The accused challenged the judgment of the trial court in Crl.
Appeal No. 71 of 2007 and as per the judgment dated 21.5.2007 of the
learned Additional District and Sessions Judge, (Adhoc-II), Thodupuzha,
the accused was found not guilty and she was acquitted. The present
appeal is filed challenging the above judgment in Crl. Appeal No. 71 of
2007 setting aside the trial court judgment and acquitting the accused.
7. Heard Sri. K. Aravind Menon, the learned counsel representing
the learned counsel for the appellant on record, Sri. T.J. Michael, the
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learned counsel for the accused/first respondent and Sri. Alex M.
Thombra, the learned Senior Public Prosecutor for the second
respondent.
8. The learned counsel for the appellant argued that the finding of
the Sessions Court setting aside the trial court judgment and acquitting
the accused is without appreciating the evidence in a proper manner. It
is argued that the accused has not disputed the signature in the cheque
and that the Sessions Court ought to have found that the complainant is
entitled for the benefit of the statutory presumptions.
9. The learned counsel for the accused/first respondent argued
that the complainant has not disclosed the date of execution and
issuance of the cheque in the complaint or in the chief affidavit of PW1
and that the complainant has also not produced the alleged guarantee
agreement executed by the accused and there is no satisfactory
evidence regarding the actual liability of the husband of the accused in
the chitty transaction as on the date of the cheque. It is also argued that
the specific case of the accused is that the complainant company
obtained blank cheques of the accused and her husband at the time of
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giving the prize amount of the chitties to the husband of the accused
and the complainant misused the cheque for filing the complaint and no
amount was due from the accused to the complainant.
10. PW1 is the Assistant Business Manager of the complainant
company, who filed the complaint on the basis of Exhibit P1, power of
attorney executed by the Managing Director of the company in favour of
PW1 on 06.09.2004. The original chief affidavit of PW1 is dated
20.06.2006 and additional chief affidavit is seen filed on 10.08.2006 and
in the additional chief affidavit, it is stated that a resolution was passed
by the Board of Directors of the company on 27.08.2004 authorising and
empowering PW1 to represent the company and a true copy of the
resolution is marked as Exhibit P9.
11. In cross examination, PW1 categorically stated that the
accused has not executed any guarantee agreement undertaking to pay
the chitty instalments on the default of her husband. The debt
acknowledgment of chitty bearing No. J2F/93/03 dated 24.3.2004 is
marked as Exhibit P10 and the debt acknowledgment of chitty bearing
No.G2F/0280/KDM/08 dated 24.3.2004 is marked as Exhibit P11.
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According to PW1, as per Exhibit P10, Rs.1,36,050/- is due as on
24.03.2004. But, the same is not reflected in Exhibits P2 and P3 ledger
extract of the chitty account produced.
12. PW1 further admitted in cross examination that he cannot
identify the handwriting in Exhibits P10 and P11. PW1 has no case that
he witnessed the execution or issuance of the cheque by the accused.
He also admitted that he has no direct knowledge regarding the liability
or remittance in the chitty account and he is deposing on the basis of the
available documents. The evidence of PW1 in cross examination also
shows that he never had any occasion to see the original of Exhibit P9,
resolution of the Board of Directors.
13. PW2 is the Branch Manager of the complainant company at
Thodupuzha. According to PW2, the husband of the accused subscribed
for two chitties and the accused was the guarantor for both the chitties.
PW2 deposed that a sum of Rs.2,10,279/- was due and hence, notice
was issued to subscriber and guarantor and subsequently, the accused
reached the branch office and issued Exhibit P4 cheque for
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Rs.2,10,279/-. PW2 also deposed that the accused signed the cheque in
his presence. In cross examination, PW2 deposed as follows:
"പ്രതിയുടെ ഭർത്താവും വാദി സ്ഥാപനവും തമ്മിലുള്ള ചിട്ടി ഇടപാടിനെ
പറ്റി രേഖ നോക്കിയിട്ട് അറിയാം. ചിട്ടി സംബന്ധമായ കാര്യങ്ങളെ പറ്റി
നേരിട്ടറിയാവുന്ന ആരെങ്കിലും ഉണ്ടോ? ഇല്ല രേഖ നോക്കി അറിയാം.
(A)"
14. In cross examination, PW2 admitted that apart from Exhibits
P2 and P3, there is no other document relating to Exhibit P4 cheque and
he further admitted that the husband of the accused has paid the
amounts mentioned in Exhibits P2 and P3. According to PW2, Exhibits D1
and D2 are the passbooks issued to the husband of the accused in
connection with the chitty transaction and as per Exhibits D1 and D2,
collection of instalments started from 28.07.2003. But, the evidence of
PW2 shows that the husband of the accused subscribed for one chitty on
22.9.2003 and the other on 25.09.2003. However, PW2 would say that
the amounts collected before the starting of the chitty is entered in the
accounts. PW2 denied the suggestion that the amounts collected by the
daily collection agent are not entered in the account. He also denied the
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suggestion that the husband of the accused has paid the entire amounts
due in the chitty transaction to the complainant company.
15. In cross examination, PW2 deposed that the last payment as
per Exhibit P2 was during February, 2005 and last payment as per
Exhibit P3 was during December, 2005. In this connection, it is pertinent
to note that Exhibit P4 cheque for Rs.2,10,279 is dated 21.07.2005.
16. It is well settled that the cheque must represent the legally
enforceable debt as on the date of its presentation, as held by the
Honourable Supreme Court in Dashrathbhai Trikambhai Patel v.
Hitesh Mahendrabhai Patel [(2023) 1 SCC 578]
17. DW1 is the Branch Manager of South Indian Bank,
Muthalakodam. The evidence of DW1 and Exhibits D3 and D4 shows
that the accused opened SB account No. 4269 in the said Branch on
24.03.2003 and there was no transaction in the said account. In cross
examination, DW1 stated that Exhibit P4 cheque was issued to the
accused and subsequently, the same was dishonoured for insufficiency of
funds in the account of the accused as per Exhibit P5 memo.
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18. The husband of the accused is examined as DW2. According
to DW2, he subscribed for two chitties and at the time of receiving the
bid amount on 24.03.2004, the complainant company obtained two
cheque leaves each of himself and his wife. DW2 deposed that his wife
was the nominee in the chitty and since she was not having a bank
account, an account was opened in South Indian Bank, Muthalakodam
Branch on 24.03.2004. He would say that he paid the entire instalments
in the chitty directly and also through collection agents and no amount is
due to the complainant company in the chitty transaction.
19. The learned counsel for the accused argued that the evidence
elicited from PWs 1 and 2 during cross examination creates serious
doubt about the existence of debt and about the transaction and
therefore, the presumption under Section 139 of N.I. Act is rebutted
and the defence case stands probabilised, as held in ANSS Rajashekar
v. Augustus Jeba Ananth [2019 (2) KHC 155= 2019 (1) KLD 492]
20. In Basalingappa v. Mudibasappa ((2019) 5 SCC 418), the
Hon'ble Supreme Court summarised the principles of law governing the
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presumptions under Sections 118 and 139 of the N.I Act in the following
manner:
"(i) Once the execution of cheque is admitted Section 139 of
the Act mandates a presumption that the cheque was for
the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable
presumption and the onus is on the accused to raise the
probable defence. The standard of proof for rebutting the
presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely
on evidence led by him or accused can also rely on the
materials submitted by the complainant in order to raise a
probable defence. Inference of preponderance of
probabilities can be drawn not only from the materials
brought on record by the parties but also by reference to
the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the
witness box in support of his defence, Section 139
imposed an evidentiary burden and not a persuasive
burden. "
21. In Shree Daneshwari Traders (M/s.) v. Sanjay Jain and
Another [2019 (4) KHC 495], the Hon'ble Supreme Court followed the
principles formulated in Kumar Exports v. Sharma Carpets [2009
KHC 219], wherein it is held as follows :
"20. The accused in a trial under S.138 of the Act has two
options. He can either show that consideration and debt did not exist
or that under the particular circumstances of the case the non -
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existence of consideration and debt is so probable that a prudent man
ought to suppose that no consideration and debt existed. To rebut the
statutory presumptions an accused is not expected to prove his
defence beyond reasonable doubt as is expected of the complainant
in a criminal trial. The accused may adduce direct evidence to prove
that the note in question was not supported by consideration and that
there was no debt or liability to be discharged by him. However, the
court need not insist in every case that the accused should disprove
the non - existence of consideration and debt by leading direct
evidence because the existence of negative evidence is neither
possible nor contemplated. At the same time, it is clear that bare
denial of the passing of the consideration and existence of debt,
apparently would not serve the purpose of the accused. Something
which is probable has to be brought on record for getting the burden
of proof shifted to the complainant. To disprove the presumptions,
the accused should bring on record such facts and circumstances,
upon consideration of which, the court may either believe that the
consideration and debt did not exist or their non - existence was so
probable that a prudent man would under the circumstances of the
case, act upon the plea that they did not exist. Apart from adducing
direct evidence to prove that the note in question was not supported
by consideration or that he had not incurred any debt or liability, the
accused may also rely upon circumstantial evidence and if the
circumstances so relied upon are compelling, the burden may
likewise shift again on to the complainant. The accused may also
rely upon presumptions of fact, for instance, those mentioned in
S.114 of the Evidence Act to rebut the presumptions arising under
S.118 and S.139 of the Act."
22. It is well settled that the standard of proof which is required
from the accused to rebut the statutory presumption under Sections 118
and 139 of the N.I Act is preponderance of probabilities and that the
accused is not required to prove his case beyond reasonable doubt. The
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standard of proof, in order to rebut the statutory presumption, can be
inferred from the materials on record and circumstantial evidence.
23. In M.S.Narayana Menon v. State of Kerala [(2006) 6
SCC 39], the Hon'ble Supreme Court considered the nature of the
standard of proof for rebutting the presumption under Section 139 of the
N.I Act and it was 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.
24. The Honourable Supreme Court in Sanjabij Tari v. Kishore
S.Borcar [2025(6) KHC 250(SC)], held that ultimately, it becomes the
duty of the courts to consider carefully and appreciate the totality of the
evidence and then come to a conclusion whether, in the given case, the
accused has shown that the case of the complainant is in peril for the
reason that the accused has established a probable defence.
25. In this case, the evidence of PW1, the power of attorney
holder of the Managing Director of the company, would show that he has
no direct knowledge regarding the transaction and the execution and
issuance of the cheque. Even though, PW2, Branch Manager of the
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complainant, deposed that the accused signed the cheque in his
presence, he also admitted in cross examination that he has no direct
knowledge regarding the transaction and that he is deposing after
perusing the records in the office relating to the chitty transaction.
26. PW2 categorically admitted that the husband of the accused
has paid the amounts mentioned in Exhibits P2 and P3 and that the
amount collected by the daily collection agent will be entered in the
passbook marked as Exhibits D1 and D2. The evidence of PW2 in cross
examination shows that the complainant company started collection of
the instalments prior to the subscription of the chitties on 22.09.2003
and 25.09.2003 respectively. Admittedly, the company started collection
of the instalments from 28.07.2003 onwards and the last payment as
per Exhibit P3 was during December, 2005. There is no satisfactory
evidence as to what exactly was the amount due from the husband of
the accused as on 21.07.2005.
27. As noticed earlier, PW1 has no direct knowledge regarding the
execution and issuance of the cheque or the chitty transaction. The
complainant has not disclosed the date of execution and issuance of the
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cheque in the complaint or in the evidence of PWs 1 and 2. Even though,
PW2 deposed that the accused signed the cheque in his presence, I find
that his evidence in this regard is vague to the core. It is pertinent to
note that PW2 has not deposed anything regarding the date on which
the accused signed and handed over the cheque. The complainant
company has also not produced the guarantee agreement said to be
executed by the accused in favour of the company.
28. On a careful re-appreciation of the entire evidence, I find that
the complainant has not succeeded in proving that the accused issued
Exhibit P4 cheque in discharge of a legally enforceable debt and having
regard to the material contradictions brought out in the cross
examination of PWs 1 and 2, I find that the view taken in the impugned
judgment is a possible view and therefore, the appeal is liable to be
dismissed.
In the result, this appeal is dismissed.
sd/-
JOHNSON JOHN,
JUDGE.
Rv
