IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MRS. JUSTICE M.C.HARI RANI TUESDAY, THE 12TH APRIL 2011 / 22ND CHAITHRA 1933 CRL.A.No. 1053 of 2004() ------------------------ CC.376/2001 of JUDL. MAGISTRATE OF FIRST CLASS-II(MOBILE), KOTTAYAM .................... APPELLANT(S): COMPLAINANT: -------------------------- T.J.CHERIAN, THALAKKULAM, ITHITHANAM P.O., KURICHY, CHANGANACHERY. BY ADV. SRI.MVS.NAMBOOTHIRY RESPONDENTS/ACCUSED & STATE: ------------------------------- 1. CHINCHAMMA KURUVILLA, W/O. KURUVILLA ANTONY, ADIPUZHA HOUSE, PERUNNA EAST, CHANGANACHERY. 2. THE STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA. ADV. SRI.THOMAS MATHEW NELLIMOOTTIL FOR R1 PUBLIC PROSECUTOR SUMANGALA.P.N. THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 12/04/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: M.C.HARI RANI, J. * * * * * * * * * * * * * Crl.A.No.1053 of 2004 ---------------------------------------- Dated this the 12th day of April 2011 J U D G M E N T The appellant is the complainant in C.C.No.376/2001 on the file of the Judicial First Class Magistrate Court-II (Mobile), Kottayam which was filed alleging offence under Section 138 of the Negotiable Instruments Act. As per judgment dated 30/01/2004, the accused was acquitted under Section 255(1) of the Cr.P.C which is challenged by the appellant/complainant in this appeal. 2. The case of the complainant put forward in the complaint is briefly as follows: Ext.P1 cheque dated 22/2/2001 was given by the accused to the complainant for the amount of Rs.2,00,000/- which was due from the accused to the complainant. When that cheque was presented for collection, it was dishonoured by the bank for the reason “account closed”. The real reason for the dishonouring of the cheque was insufficiency of funds and the accused deliberately closed her account in the bank. Accordingly lawyer Crl.Appeal No.1053/04 2 notice dated 28/2/2001 was issued to the accused which was accepted and a reply notice was sent by the accused dated 12/3/2001. Since the accused failed to pay the amount covered under Ext.P1 cheque, the complaint was preferred by the complainant before the learned Magistrate. 3. On the side of the complainant/appellant, PW1 was examined and Exts.P1 to P9 were marked. The accused was examined under Section 313 Cr.P.C. Dws 1 to 5 were examined and Exts.D1, D1(a), D1(b) and D2 were marked for the defence. After considering the evidence on record, the learned Magistrate acquitted the accused under Section 255(1) of Cr.P.C which is challenged in this appeal. 4. Heard the learned counsel appearing for the complainant/appellant and the learned counsel for the 1st respondent/accused. Heard the learned Public Prosecutor also. 5. The learned counsel for the appellant submitted that the order of acquittal of the accused is illegal and unsustainable. According to the learned counsel, presumption under Sections 118 and 139 of the Negotiable Instruments Act is in favour of the complainant for the reason that the accused has admitted the Crl.Appeal No.1053/04 3 execution of Ext.P1 cheque and the evidence adduced from the side of the accused is not sufficient to rebut that presumption. The learned counsel for the 1st respondent supported the judgment of the court below. 6. The original complainant/appellant died on 20/5/2005 during the pendency of this appeal. His wife and children were impleaded as additional appellants 2 to 4 in this appeal as per order dated 11/4/2008 in Crl.M.A.No.3683/2008. 7. The point for consideration in this appeal is whether Ext.P1 cheque was issued to the complainant by the accused to discharge any liability. The specific defence case put forward in the cross-examination of PW1 and also in the evidence adduced from the side of the defence, both oral and documentary is to the effect that the accused had never issued a cheque to the complainant and the disputed cheque, Ext.P1 has no valid consideration. How far the complainant has proved his case and whether any presumption under Sections 118 and 139 of the Negotiable Instruments Act is available to the appellant and if so whether the accused has rebutted that presumption by adducing satisfactory evidence is the point for consideration. Crl.Appeal No.1053/04 4 8. In the complaint and in the lawyer notice Ext.P5, the case put forward by the complainant was that an amount of Rs.2,00,000/- was due from the accused to him and the accused gave him the cheque dated 22/2/2001 drawn at Changanassery Co-operative Urban bank for the amount of Rs.2,00,000/- which was due from the accused to the complainant. That cheque, when presented for collection was dishonoured for the reason 'account closed'. Even after the receipt of the lawyer notice sent by the complainant informing the accused about the dishonouring of the cheque and demanding the amount of the cheque, the accused did not pay the amount. Thus, according to the appellant, the accused has drawn the disputed cheque in his favour at Changanassery Co-operative Urban Bank on the account maintained by the accused with the banker for the payment of an amount of Rs.2,00,000/- to the complainant from the account for the discharge of the liability and the cheque was returned by the bank unpaid due to the insufficiency of funds and for the reason account closed. So the act of the accused will come under the provisions of Section 138 of the Negotiable Instruments Act which is an offence is the allegation in the Crl.Appeal No.1053/04 5 complaint. As against these allegations, the accused sent a reply marked as Ext.P9 wherein it was contended that the accused never gave the disputed cheque as alleged by the complainant and the accused was not liable to pay any amount as there was no legally enforcible debt. The circumstances under which the alleged cheque happened to be with the complainant were also stated. According to the accused, the complainant was a family friend and used to help her family members in their necessities. During June 1997, the accused opened a loan account with Changanassery Co-operative Urban Bank and the bank has issued a cheque book bearing numbers 020651 to 020660. The accused sought the help of the complainant for dealing with the bank and on 26/6/1997, the accused, her son Antony Kuruvila and the complainant went to the bank for obtaining the loan amount by mortgaging the property of the accused. On that day, the accused signed cheque No.020651 for withdrawing the amount from the bank. Other entries in that cheque were made by the complainant, as the parties were in cordial terms. Since there was some over writing in that cheque, the same was cancelled. The accused handed over signed cheque number Crl.Appeal No.1053/04 6 020652 to the complainant for withdrawing the loan amount and entrusted it to the complainant. The accused, after handing over the cheque book also to the complainant, left to her house for some urgent necessities. The entries in cheque number 020652 were made by the complainant. Accordingly, the accused withdrawn an amount of Rs.1,99,500/- from the bank after depositing Rs.500/- in her account opened on that day with the bank. The cheque book happened to be with the complainant, in these circumstances. Subsequently, the accused paid off the entire loan amount and that account with the bank was closed on 08/09/2000. Before closing that account, the cheque book was not returned by the complainant to the accused. After receipt of notice of this case, the accused came to know that cheque number 020654 was unauthorisedly filled by the complainant and misused that cheque which is the disputed cheque. The complainant had enmity towards the accused for the reason that she did not give the loan as demanded by the complainant at the time of marriage of the son of the accused and to wreck vengeance on the accused, the disputed cheque was misused by the complainant illegally. Crl.Appeal No.1053/04 7 9. Thus the entire case put forward by the complainant regarding previous debt and the issuance of the post dated cheque etc. are denied by the accused. The specific contention raised by the accused in the reply notice was that the disputed cheque was in the hands of the complainant in connection with a mortgage loan availed by the accused from Changanassery Co- operative Urban Bank on 26/6/1997 at the time when they were family friends and the complainant used to help the accused and her family members in their necessities and that cheque in the hands of the complainant was misused by the complainant. Thus the entire transaction with regard to the disputed cheque and the liability thereunder were disputed by the accused. 10. The complainant himself was examined as PW1 to prove his case and marked Exts.P1 to P9 also to substantiate the same. Dws 1 to 5 were examined and Exts.D1, D1(a), D1(b) and D2 were marked on the defence side. 11. The complainant alleged that the cheque was issued by the accused to him for the due discharge of a legally enforcible debt/liability. According to PW1, on 15/4/1999, the accused borrowed an amount of Rs.1,50,000/-. It was not repaid. Crl.Appeal No.1053/04 8 Subsequently, on 01/09/1999, Ext.P1 post dated cheque for Rs.2,00,000/- dated 22/2/2001 was issued by the accused after calculating the principal amount along with interest at 18% per annum. When the complainant presented the same on 23/02/2001 before the bank, it was dishonoured. Thereafter, after complying with the statutory formalities, the complaint has been filed against the accused. Thus, according to the complainant, Ext.P1 cheque was issued on 01/09/1999 with a date posterior to the issuance of the cheque which had to be encashed on 22/2/2001. The accused admitted the signature in Ext.P1 cheque; but denied the other entries therein. According to the defence, no amount has been borrowed from the complainant and the accused is not bound to pay any amount to the complainant and hence Ext.P1 cheque was not issued by the accused to the complainant in discharge of a legally enforcible debt and the same is not supported by consideration. Thus the accused took up a stand that the cheque was not issued by her to the complainant for the due discharge of any legally enforcible debt/liability. The defence case during cross-examination of the complainant/PW1 and during 313 examination of the accused Crl.Appeal No.1053/04 9 before the trial court and in the oral evidence of DWs. 4 and 5 was that the complainant misused the cheque leaf which was in his custody and presented for encashment before the banker. 12. It is the admitted case that the complainant and the accused are educated persons and family friends and known to each other. The complainant used to help the accused who were working together and in case of necessities and also in the business dealings of the accused and to write the account in the business as revealed from Ext.D2, the account book which was written by the complainant in his hand writing as admitted by PW1. It is contended by the learned counsel for the 1st respondent/accused, that it has not been established by the complainant that Ext.P1 cheque had been issued by the accused for the due discharge of a legally enforcible debt/liability. It is the admitted case of the accused that the disputed cheque was signed by her and handed over to the complainant. But the accused disputed the circumstances under which it came in the hands of the complainant. Thus the execution of the disputed cheque in favour of the complainant is disputed by the accused. It is true that once the signature, execution and handing over of Crl.Appeal No.1053/04 10 the cheque is proved by the complainant by adducing evidence, presumption under Section 139 of the N.I.Act comes into play until the accused discharges the burden on him/her atleast by the inference of preponderance of possibilities and probabilities as in a civil case. 13. It is also argued by the learned counsel for the 1st respondent that the appellant/complainant has no consistent case regarding the issuance of the disputed cheque and there are inconsistent statements given by PW1, the complainant and his wife when examined as DW3 on the side of the defence regarding the manner in which the cheque was given by the accused to the complainant. In the complaint, the complainant has put forward a case that an amount of Rs.2,00,000/- was due from the accused to him and the accused gave to him the cheque dated 22/2/2001 for that amount. That cheque, when presented for collection, was dishonoured for the reason “account closed”. Even after the receipt of lawyer notice sent by the complainant informing the dishonour of the cheque and demanding the amount of the cheque, the accused did not pay the amount. Thus, the accused had committed the offence punishable under Crl.Appeal No.1053/04 11 Section 138 of the Negotiable Instruments Act. In order to prove his case, the complainant himself was examined as PW1 and he deposed in support of his case in the complaint. The accused has disputed of having any loan transaction with the complainant. The defence was that the complainant misused one of the signed blank cheques which was handed over by the accused to the complainant on 26/6/1997 while availing a loan from the bank by the accused on depositing the title deeds of her property in order to give the same to the bank for disbursing the loan amount. That defence was taken by the accused in the reply notice sent by her in response to the statutory notice issued by the complainant. In the chief affidavit filed by the complainant, it was averred that on 15/4/1999, the accused came to his house at Chethipuzha of Changanassery and borrowed Rs.1,50,000/-. Demand was made by PW1 to return that amount with interest. Then on 01/09/1999, the accused again came to his house and gave cheque No.020654 dated 22/2/2001 drawn on her account in the main branch of Changanassery Co-operative Urban Bank for Rs.2,00,000/- after calculating the interest upto that date. It was signed by the accused in his presence and that cheque when Crl.Appeal No.1053/04 12 presented for collection was dishonoured for want of sufficient funds in the account of the accused. Further, that account was closed by the accused on 08/09/2000 as revealed from Exts.P2 and P3 dated 23/2/2001 and 24/2/2001. Immediately, a registered lawyer notice was sent on 28/2/2001 demanding the cheque amount as revealed from Exts.P4, P5 and P6. Reply notice issued by the accused was received by the complainant and the same was produced as Ext.P9. In the cross-examination, it was admitted by PW1 that he was the managing partner of Thalakkulam bankers which was a finance firm and a case was decreed against the accused with regard to a financial transaction with that firm for the amount due from the accused. Thus, according to PW1, the accused was the defaulter and a case was decreed against the accused for the amount due to the firm conducted by him. It is for such a defaulter, Rs.1,50,000/- was given as loan by him on 15/4/1999 without any document and without any security which is improbable and unbelievable. Further the post dated cheque was handed over by the accused in the year 1999 itself that is on 01/09/1999 as deposed by PW1 in the cross-examination after calculating the original amount Crl.Appeal No.1053/04 13 with interest at Rs.2,00,000/- as on 22/2/2001 in the presence of the husband of the accused and the wife of PW1 etc. cannot be accepted as trustworthy. The defence version that the complainant introduced the accused before the bank while availing loan by mortgaging the title deeds in respect of property of the accused and PW1 signed as a witness in the mortgage deed and one of that cheque leaves issued from the bank to the accused is the disputed cheque, Ext.P1 are admitted by PW1. The cheque book with 8 counterfoils and two cheque leaves was marked as Ext.D1. The suggestion put to PW1 by the learned counsel for the accused that all the counterfoils were in the custody of the complainant and the handwritings in the first four counterfoils were that of the complainant/PW1 were not denied by him and admitted handwritings of PW1 in Ext.D1 cheque book were marked as Exts.D1(a) and D1(b). According to the defence, at the time of repayment of the loan availed by the accused from Urban Co-operative Bank, the accused was directed to return the cheque book issued to her while availing loan. But, at that time, the cheque book was in the custody of the complainant/PW1 and the complainant returned that cheque book only after keeping Crl.Appeal No.1053/04 14 the signed cheque leaves with him and one of that cheque leaves was misused by him and presented before the bank and the same was not supported by any consideration. This case of the defence was accepted by the trial court as the most probable one. 14. Wife of the complainant was examined on the defence side as DW3. She has deposed that she knew the accused and she is their family friend. According to her, the accused used to come to their office occasionally and on one day, the accused and her husband came to her house and she witnessed handing over of the amount by her husband to the accused on the personal cheque of the accused. But, she did not remember the date, month or the year. Thus, according to DW3, handing over of the cheque by the accused to the complainant, her husband/PW1 and handing over of the amount by the complainant to the accused were on the same day in the presence of the husband of the accused. The case of the complainant is entirely different and contrary to the version of DW3. According to the complainant/PW1, Rs.1,50,000/- was borrowed by the accused from him on 15/4/1999 and post dated cheque was given on Crl.Appeal No.1053/04 15 01/09/1999 for Rs.2,00,000/- after calculating interest at the rate of 18% per annum as on 22/2/2001 for encashing the cheque by the complainant on that day, which according to him was signed by the accused in his presence. With these discrepancies, the evidence of complainant/PW1 cannot be believed or accepted as such. 15. DW4 is the son of the accused. The accused was examined as DW5. Both Dws 4 and 5 have deposed that on 26/6/1997 an amount of Rs.2,00,000/- was availed as loan by DW5 from Urban Co-operative Bank and an account was opened on that day for that purpose and Ext.D1 cheque book was issued for the same from the bank. At that time, Dws 4 and 5 and the husband of the accused were present in the bank. After depositing Rs.500/- in the bank, the balance loan amount of Rs.1,99,500/- was received as loan. The first cheque leaf was cancelled due to overwriting. The remaining three cheque leaves were also signed by DW5 and given to PW1 along with the cheque book as demanded by him for the purpose of receiving the loan amount from the bank which was disbursed only in the afternoon. According to DW4, his parents left the bank and gone Crl.Appeal No.1053/04 16 to their house due to some urgent domestic reasons. Loan amount was received by PW1 from the bank on presenting the second cheque leaf. The cheque book was kept by PW1 in his custody and was returned to DW5 only subsequently after keeping the remaining two signed cheque leaves with him. The returned cheque book as such was identified by DW4 as Ext.D1 and the same was also admitted by PW1 from the witness box. Thus, the evidence adduced by Dws 4 and 5 were in tune with the defence case. During 313 examination also, the accused has stated that she had handed over three signed cheque leaves to the complainant while availing the loan of Rs.1,99,500/- from Urban Co-operative Bank on 26/6/1997 and the complainant introduced her before the bank and that loan was availed by the accused as demanded by the complainant to give that amount to him, to make up the loans sustained in a joint ready made business conducted by the accused, her husband and complainant. One of that signed cheque leaves was misused by the complainant after making the entries therein in his handwriting and the counter foil of which was also written by the complainant as revealed from Ext.D1 and presented the same Crl.Appeal No.1053/04 17 before the bank. Thus, the defence case put forward both in the oral evidence as well as in the documentary evidence that the accused had neither borrowed any amount nor gave any cheque to the accused has been accepted as more probable by the trial court after considering the entire evidence, both oral and documentary adduced by the complainant as well as by the accused. 16. Considering the facts and circumstances of this case, it will be probable to take note of the following decisions rendered by the Apex Court and cited by the learned counsel for the respondent/accused. 1. Narayana Menon v. State of Kerala [2006(3)KLT 404(SC)] 2. Krishna Janardhan Bhat v. Dattatraya Hegde [2008(1) KLT 425(SC)] 17. Regarding to the extent of burden cast upon the accused to rebut the presumption arising under Section 139 of the N.I.Act it was observed in the decision in Narayana Menon (Supra) that “ For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on Crl.Appeal No.1053/04 18 behalf of the complainant could be relied upon. The standard of proof evidently is pre- ponderance of probabilities. Inference of pre- ponderance of probabilities can be drawn not only from the materials on records but also by reference to the circumstances upon which he relies.” 18. In Krishna Janardhan (Supra), it was observed as follows: “ An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on records. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is 'preponderance of probabilities.' 19. It is not the signing of the cheque, but its execution that is necessary to draw the presumption under Section 139 of the N.I.Act. If only execution is established, then only the presumption follows that it has been issued towards discharge of a debt or liability. Execution of the instrument is not a physical act of signing the instrument but of drawing that instrument with the intent to do so. No doubt, there will be cases of obtaining Crl.Appeal No.1053/04 19 blank signed cheques as security for loan transaction. In such a case, mere signing of the instrument cannot be considered as execution of the instruments. But, of course, when the instrument is admitted as duly signed, a burden is cast on the accused to place materials for substantiating his/her evidence to rebut the presumption under Section 139 of the N.I.Act that the instrument has not been executed towards discharge of a debt or liability. Where the accused has discharged the burden by producing materials or from the circumstances presented in the case, showing that the defence case pleaded is more probable, unless and until the complainant establishes due execution of the cheque and the transaction as alleged, no conviction is permissible by drawing the presumption under Section 139 of the N.I.Act. In the present case, the complainant has not proved his case despite rebuttal of the presumption under Section 139 of the N.I.Act by the accused by showing that her defence version is probable. It is clear from the judgment rendered by the lower court that after careful consideration of the evidence on record the learned J.F.C.M-II (Mobile), Kottayam came to the conclusion that the defence case is more probable and the Crl.Appeal No.1053/04 20 accused has succeeded in rebutting