IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN THURSDAY, THE 19TH MARCH 2009 / 28TH PHALGUNA 1930 CRL.A.No. 218 of 2002(C) ------------------------ ST.165/1999 of CHIEF JUDICIAL MAGISTRATE COURT, KOZHIKODE .................... APPELLANT(S): COMPLAINANT. -------------------------- C.GOPIKUMAR, `SEENA NIVAS', THAZHETHEDATH, P.O.POKKUNNU, KOZHIKODE. BY ADV. SRI.P.K.RAMKUMAR RESPONDENT(S): ACCUSED & STATE. ------------------------------- 1. A.AZEEZ, MARAKKATTUVALAPPIL HOUSE, P.O.KAKKODI, KOZHIKODE DISTRICT. 2. STATE OF KERALA,REP.BY THE PUBLIC PROSECUTOR, ERNAKULAM. ADV. SRI.M.P.MOHAMMED ASLAM FOR R1 PUBLIC PROSECUTOR SMT.PUSHPALATHA FOR R2 THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 19/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: S.S.SATHEESACHANDRAN, J. ----------------------------------------- Crl.A.No.218 of 2002 ----------------------------------------- Dated this the 19th March, 2009 JUDGMENT Complainant is the appellant. The complaint filed against the accused for the offence punishable under Section 138 of the Negotiable Instruments Act (for short, 'the Act'), after trial ended in the acquittal of the accused. Questioning the correctness and legality of the judgment of acquittal, the appeal is preferred by the complainant. 2. The case of the complainant is that towards discharge of a loan availed, the accused issued Exhibit P1 cheque promising its encashment on presentation in due course. The cheque presented was however dishonoured due to insufficiency of funds in the account of the accused. Statutory notice issued intimating the dishonour of cheque and demanding the sum covered by the instrument was not responded. The complainant thereupon launched prosecution against the accused imputing the offence under Section 138 of the Act. Crl.A.218/02 2 3. The accused on appearance pleaded not guilty to the offence imputed. The trial proceeded with the complainant examining himself as PW1 and marking Exhibits P1 to P4 series to prove his case. The accused during the course of the cross-examination of the complainant and also when questioned under Section 313 Cr.P.C advanced a defence that the cheque had been handed over in blank form with signature to another, and he had no transaction whatsoever with the complainant. The accused also got examined a witness as DW1 to prove his defence. The learned Magistrate after appreciating the materials tendered in the case was not inclined to accept the defence set up by the accused as true and convincing. But, on taking a view that the complainant had failed to prove the transaction as alleged, the accused was acquitted of the offence imputed. 4. I heard the leaned counsel on both sides. A preliminary objection was raised by the learned counsel for the accused that in a case arising under appeal the scope of the appellate court reviewing the evidence is limited and interference over Crl.A.218/02 3 a finding of the lower court is permissible only if it is perverse. Reliance was placed to substantiate his submission on State of Goa v. Sanjay Thakran and another ( (2007)3 SCC 755). I am afraid, the principles enunciated in the decision have to be applied taking note of the nature of the offence imputed and also the facts and circumstances involved in the case. Normally, the remedy on dishonour of a cheque is under the civil law, but, penal provisions have been incorporated in the Act with the avowed object to enhance the acceptability of cheques. In other words, to insulate commercial transactions involving cheques, the legislature thought it fit to include penal provisions in the Act. In that backdrop, a prosecution against a person, whose cheque was bounced due to insufficiency of funds in his account, has to be analysed and appreciated. 5. On a perusal of the records of the case, it is seen that the complainant, who was examined as PW1, has sworn to his case. The learned Magistrate found fault with the complainant in not explaining the discrepancy in the writings seen in the Crl.A.218/02 4 signature in comparison with other writings in the instrument. I am afraid, the learned Magistrate has not taken into account Section 20 of the Act which spells out that an instrument can be given in blank form with signature alone and payee or the holder in due course gets authority to fill up and make the instrument presentable. If at all the instrument is in blank form with signature alone, the burden is on the accused to show how the instrument came to the hands of the complainant, and unless he gives a cogent and convincing explanation, no burden is cast upon the complainant to explain the discrepancy in the writings. Here the defence advanced by the accused is that he had no transaction with the complainant and he had handed over the cheque to another in blank form. It is pertinent to note that when a statutory notice was issued by the complainant on dishonour of cheque it was not responded. He was threatened of prosecution on dishonour of cheque which, admittedly, came from his account. The explanation offered in the box as DW1 is that he had no transaction with the complainant and therefore he did Crl.A.218/02 5 not send a reply. That explanation has to be received with a pinch of salt. Merely by setting up a defence the accused will not be able to counter the case of the complainant especially where the statute demands of a presumption that the instrument had been issued in discharge of a debt or liability. True, if consideration is disputed or existence of debt is challenged, that may have relevance depending upon the totality of the facts and circumstances involved in the case. Where there is nothing to doubt that the transaction by which the cheque was issued was not bona fide, the presumption has to be applied with full force. Strangely, the learned Magistrate has found fault with the complainant for not cross-examining the accused on the defence set up by him that the cheque had been handed over to another in a different transaction. When that case set up by the defence cannot be accepted on its face value, especially where the explanation offered by the accused for not sending a reply is found untenable, no burden was cast upon the complainant to disprove the defence of the accused. No doubt, onus is always on the complainant to prove his case. Crl.A.218/02 6 When the complainant has discharged his burden and the defence advanced is to be found to be not established nor even appear to be probable, complainant cannot be found fault with for not proving the falsity of the defence. 6. The learned Magistrate has gone to the extent that the case of the complainant must fail for the reason that he has not established the loan transaction and the issue of Ext.P1 cheque in consideration of that transaction. Quantum of consideration or proof of loan transaction to sustain a claim based on negotiable instrument arise only when statutory presumptions are rebutted or found inapplicable owing to denial of execution, allegation of fraud in the transaction etc. When Section 139 of the Act postulates that it shall be presumed unless it is disproved that the instrument had been issued towards discharge of a debt or liability, the complainant cannot be called upon to prove the loan transaction under which the instrument was handed over by the accused. That may arise if that presumption is rebutted by the accused. Similarly, as already referred to, the non cross-examination of Crl.A.218/02 7 the accused with respect to the defence pleaded by him cannot be taken in isolation, but, appreciating his conduct of not sending a reply even after receiving a notice threatening of prosecution for the offence under Section 138 of the Act. He ignored the notice is his version in evidence. He has not offered sufficient convincing explanation how the cheque came to the hands of the accused also. Yet another reasoning taken by the court below is that the conduct of the complainant in giving huge sum of money solely on the basis of a cheque is unconvincing. He should have taken solid security and should not have advanced money seems to be the view of the court. That view runs counter to the spirit of the Act itself. The instruments covered by the Act are intended to facilitate transactions and, in fact, avoiding of solid security for such transaction. So, I have no hesitation to hold that the appreciation of the evidence by the court below was improper and the findings arrived thereby are perverse. The evidence let in the case would show that cheque was handed over by the accused towards the discharge of a debt he had with the Crl.A.218/02 8 complainant. To avoid liability thereunder, he had set up a false case that the instrument was given in blank form to another and he had no transaction with the complainant. 7. In the proved facts of the case, it has to be concluded that the accused is guilty of the offence under Section 138 of the Act. So much so, in reversal of the judgment of acquittal passed by the court below, he is convicted of such offence. Now, on the question of sentence, though the circumstances presented in the case call for a deterrent punishment, imposition of at least a short term of imprisonment on the accused, having an over all view of the matter, I think, the ends of justice would be met by directing the accused to undergo imprisonment till the rising of the court and to pay compensation in respect of the dishonour of cheque to the complainant. So much so, he is sentenced to undergo imprisonment till the rising of the court and to pay compensation of Rs.45,000/- under Section 357(3) Cr.P.C, with default term of imprisonment of three months. Compensation, if ralised, shall be paid to the complainant. The Crl.A.218/02 9 accused shall pay the compensation within three months. The accused shall appear and his sureties shall produce him before the Judicial Magistrate Court, Kozhikode on 22.6.2009, and the learned Magistrate shall execute the sentence as directed. The Criminal Appeal is allowed. S.S.SATHEESACHANDRAN, JUDGE vgs. Crl.A.218/02 10 S.S.SATHEESACHANDRAN, J. ----------------------------------------- Crl.A.No.218 of 2002 ----------------------------------------- Dated this the 19th March, 2009 JUDGMENT