IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN FRIDAY, THE 17TH JULY 2009 / 26TH ASHADHA 1931 Crl.Rev.Pet.No. 290 of 2002() ----------------------------- CRA.435/2001 of SPL.COURT SPE/CBI-II & IV ADDL.SESSIONS COURT, ERNAKULAM CC.575/1997 of JUDL.MAGISTRATE OF FIRST CLASS, KOLENCHERRY .................... REVN. PETITIONER(S): APPELLANT/ACCUSED -------------------------------------- N.I.SHAJU, S/O.N.I.IPPAN, NADAKKAL HOUSE, THODUPUZHA. BY ADV. SRI.C.P.UDAYABHANU RESPONDENT(S): --------------- 1. T.K.PAULOSE, THONDANALA HOUSE, NELLADU P.O., MAZHUVANNUR VILLAGE. 2. STATE, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. ADV. SRI.P.B.ASOKAN FOR R1 SRI.GEO PAUL PUBLIC PROSECUTOR SMT.M.K.PUSHPALATHA THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 07/04/2009, THE COURT ON 17/07/2009 PASSED THE FOLLOWING: ORDER ON CRL.M.P.NO.2248/2001 IN CRL.R.P.290/2002 DISMISSED. 17.7.2009 S.S.SATHEESACHANDRAN, JUDGE /TRUE COPY/ P.A TO JUDGE S.S.SATHEESACHANDRAN, J. ------------------------------- CRL.R.P.NO.290 OF 2002 () ----------------------------------- Dated this the 17th day of July, 2009 O R D E R Concurrent verdict of guilty rendered against the petitioner for the offence under Section 138 of the Negotiable Instruments Act, for short, 'the N.I.Act', is challenged in this revision. Petitioner, hereinafter referred to as the 'accused' was prosecuted for the above offence on a complaint filed by the 1st respondent. The learned Magistrate, after trial, negativing his plea of not guilty found him guilty, convicted and sentenced him to undergo simple imprisonment for one month and to pay a sum of Rs.1,40,000/- as compensation to the complainant under Section 357 (3) of the Cr.P.C. with default term of simple imprisonment for one month more. In appeal, the Additional Sessions Judge, Ernakulam, confirmed the conviction and sentence without any modification. 2. The case of the complainant in brief is thus: The accused towards discharge of a liability under a loan availed, CRRP.290/02 2 issued Ext.P1 cheque for a sum of Rs.1,40,000/- promising its encashment on presentation in due course. Statutory notice issued intimating the dishonour of the cheque and demanding the sum thereunder was acknowledged but not responded with payment. Complainant thereupon laid a complaint to prosecute the accused for the offence under Section 138 of the N.I.Act. The accused, on appearance, pleaded not guilty when the particulars of the offence were made known. Complainant examined himself as PW1 and got marked Exts.P1 to P6 to prove his case. The accused questioned under Section 313 of Cr.P.C., and also earlier when the complainant as PW1 was subjected to cross examination, set forth a defense case that two blank signed cheques had been obtained from him by a finance company at the time when he had availed financial assistance to purchase a motor vehicle on the security of that vehicle. One of those two cheques obtained by that company after making fraudulent entries showing the complainant as the drawee at the instance of that company, after its presentation and dishonour, according to the accused, has been made use of for filing the present CRRP.290/02 3 complaint on false and baseless allegations. To support the defense so canvassed, the accused examined six witnesses including himself as DWs.1 to 6 and got marked Exts.D1 to D5. The learned Magistrate, after appreciating the materials tendered and hearing the counsel on both sides, repelling the defense case canvassed found merit in the case of the complainant and accepted it to hold the accused guilty of the offence negativing his defense as unacceptable. Accused was thereupon convicted and sentenced for the offence as indicated above, which was confirmed without modification in appeal also. 3. The challenges raised against the conviction of the accused concurrently held by the two inferior courts, no doubt, has to be appreciated within the narrow limits of revisional jurisdiction and in the absence of any glaring serious infirmity disclosing that such conviction will amount to miscarriage of justice, no interference thereof is permissible. Revision is a paternal jurisdiction vested with a superior forum to correct and rectify the orders of the inferior courts, CRRP.290/02 4 provided, such order suffers from serious infirmities likely to cause miscarriage of justice. Normally in revision, a reappreciation of evidence is impermissible unless it is shown that the findings arrived by the inferior courts could not have been formed on the materials placed or it is so perverse and unacceptable. A different view is possible than what was formed by the inferior court on the materials is not sufficient to invoke revisional jurisdiction and supplement the view of the revisional court if that view was also possible on the materials. However, after going through the orders/judgments of the inferior courts challenged in the revision with reference to the submissions made by the counsel and perusing the records of the case, if the revisional court is satisfied that the materials produced had been misconstrued and misappreciated and the conclusion arrived by the inferior courts, even if made concurrently, is patently erroneous and legally unsustainable, it has to exercise its jurisdiction to pass such orders which should have been rendered by the inferior court to avoid miscarriage of justice. CRRP.290/02 5 4. The accused has disputed of having any loan transaction with the complainant setting forth a defense version that one of the two signed blank cheques collected by a finance company had been misused by that company for prosecuting him in the case and the complainant is only a name lender on behalf of that company. That defense was projected by the accused in the reply notice (Ext.D1) sent in response to the statutory notice issued by the complainant. In the complaint, the receipt of the reply notice raising such a defense is not mentioned. That omission by itself without anything more may not be material. When the complainant was examined as PW1 in his examination in chief, there is no whisper as to having received any reply notice from the accused. In cross examination, initially the complainant would claim that he was a timber merchant having agricultural activities also. But, in the next breath he would state that he is a worker in a timber depot with daily wages of Rs.400/-. His monthly earnings, according to him, is roughly Rs.5,000/-. He pleaded ignorance whether the advocate through whom he sent notice to the accused on dishonour of the cheque had CRRP.290/02 6 received any reply. When confronted with the reply notice (Ext.D1), he pleaded of having no knowledge of that notice. He advanced a sum of Rs.1,40,000/- to the accused without obtaining any security and the funds for such advance were from the sale of timber and, at the relevant time, his passbook would show a bank balance of Rs.2 lakhs, according to the complainant. Advertence to the evidence of the complainant has been found imperative since after going through the judgments of the two inferior courts and also perusing the records, I find there was total misappreciation of evidence and also the facts and circumstances by both the courts and it has led to wrong conclusion unsustainable under facts and law causing grave injustice. 5. Not only that no evidence on the loan transaction alleged in the issue of Ext.P1 cheque was let in by the complainant but even the reply notice (Ext.D1) sent by the accused was not only suppressed even the complainant pleaded ignorance of that notice. The trial Magistrate brushed aside that circumstance as innocuous for the reason CRRP.290/02 7 that he had filed the complaint through another advocate and not by the advocate who issued the notice of dishonour of the cheque. Normal course of human contact in the circumstances presented on issue of a notice after dishonour of a cheque, that too, for a sum of Rs.1,40,000/- will demand atleast an enquiry from the complainant to his lawyer who issued the notice whether any reply was received. Ext.D2 is the acknowledgment card revealing the acceptance of the reply notice by the advocate of the complainant, who issued Ext.D1 statutory notice and it shows the acceptance of the reply notice on 23.7.1997. Complaint is seen filed on 2.8.1997. The accused has examined the advocate who issued the notice and accepted the reply notice under Ext.D1 as DW1. Issuance of notice on behalf of the complainant and later accepting the reply notice is admitted by that witness. There was no cross examination of that witnesses by the complainant. Complainant has no case, not even a suggestion to that witness that before filing of the complaint, the receipt of the reply notice and the contentions raised therein were not brought to his notice. When the complaint is seen filed nearly CRRP.290/02 8 one week after the acceptance of Ext.D1 notice by the advocate, had the notice been issued on the instructions of the complainant then the natural presumption to be drawn is that he would have enquired with the advocate whether any reply was received before filing the complaint, even if that was done through another advocate. The above circumstance coupled with the fact that the complainant, who is a worker in a timber depot earning daily wages, with an average income of Rs.5,000/-, in some months with no work at all, as borne out by his evidence, has not let in any evidence to prove the transaction leading to issue of Ext.P1 cheque and has not produced his passbook showing Rs.2 lakhs as balance funds in such book at the relevant time, as claimed before the court, cannot be ignored as having no significance in appreciating the merit of the case. 6. The accused examined one of the two persons who stood as sureties for him to avail financial loan from the General Finance Company, Thodupuzha as DW3. His evidence would show after signing of the documents of the company, CRRP.290/02 9 the accused and his sureties were sent to a nearby Service Co-operative Bank and the finance company introducing the accused got an account opened in his name in that bank, and, after opening of the account, two cheque leaves were issued to the accused. In their return to the financing company, after collecting both the cheque leaves from the accused, the loan amount was credited in his account handing over one of the cheque leaves to the accused, but, retaining the other cheque leaf after getting his signature in blank form, is the version of DW3. Cross examination of that witness by the counsel for the complainant would show that none of the particulars stated by him as referred to above was challenged. His evidence was challenged only with respect to the loan transaction with the complainant of which he pleaded ignorance. Complainant has not challenged the evidence of DW3 would be of no consequence if other materials tendered by the accused failed to connect Ext.P1 cheque with the transaction which he had with the finance company. In examining that question, the evidence of DWs.4 and 5 and that of the accused as DW6 assume much significance. CRRP.290/02 10 7. DW4 is the Secretary of the Service Co-operative Bank, Thodupuzha, which, according to him, is also known as Kolany Service Co-operative Bank. He produced a certified copy of the account opening form of the accused in that bank, which is exhibited as Ext.D3. He gave evidence that the account holder, the accused, was introduced by the General Finance company by its managing partner. He further stated that two cheque leaves were issued in his account. The account was opened on deposit of Rs.100/- on 28.7.1995. Only one transaction had taken place in that account, that is, for a sum of Rs.1,00,000/-, which was credited in that account by the General Finance company and withdrawn under one of the two cheques issued to the accused. In cross examination of this witness there was no challenge on the above aspects but only of drawing his attention to Ext.P1 cheque which was dishonoured on presentation that the account of the accused was alive when the cheque was received in the bank. DW5 is the Manager of the General Financing company, Thodupuzha. He was treated as hostile by the accused and subjected to CRRP.290/02 11 cross examination. While admitting of the hire purchase loan provided to the accused, he gave a version that there was default on the part of the accused in repayment of the loan and only five instalments were paid, with three instalments remitted together, on 2.1.1996, and, later, two other instalments together, on 3.6.1996. Repayment schedule of the hire purchase loan as per the terms was completed by 25.8.1997. The outstanding sum due under the loan, according to the witness, was remitted on 30.3.2000, and that sum Rs.82,530/- is reflected as the remittance in the account register of the company. An extract of that hire purchase ledger showing that such entry, produced with the original ledger and after comparison, was exhibited in evidence as Ext.D5. Complainant has not questioned the witness on the above aspects other than adverting to whether he had any knowledge of the transaction between the complainant and the accused, to which he pleaded ignorance. The accused examined as DW6 gave evidence in tune with his defense version. CRRP.290/02 12 8. The evidence of PW1 coupled with the fact that he was in possession of Ext.P1 cheque signed by the accused drawn on the account maintained by him would prove that the accused has issued Ext.P1 cheque to the complainant and that the presumption under Section 139 of the N.I.Act has not been rebutted in the case, was the view taken by the learned Magistrate after appreciating the materials tendered in the case. In the same way, the appellate Judge also found that PW1 has established his case set up in the complaint as regards 'the availing of the loan, issuance of Ext.P1 cheque towards repayment of the loan, presentation of the cheque for collection and bouncing of the same for want of funds, issuance of demand notice and acceptance of the same by the accused and non payment of the amount claimed.' He had also denied the suggestions on the defense version of the accused was also taken note by the appellate court adding credence to his version. After appreciating the defense evidence, the trial Magistrate has formed an opinion that the accused failed to show that the General Finance Company is in the habit of receiving signed blank cheques as security on hire CRRP.290/02 13 purchase transaction, and so much so, no conclusion could be drawn from the circumstances presented that 'the cheque was issued by the accused to the General Finance Company as security will be against the legislative intent incorporated under Section 139 of the N.IAct.' The appellate Judge has gone one step further after analysing the materials produced on the defense side expressing a view that “even if it is assumed that Ext.P1 cheque was once given as a blank signed one to the financier the possibility of the same being got back by payment with closure of the hire purchase transaction cannot be ruled out and it is also likely that the same has been subsequently used by the appellant.” Complaint presented on Ext.P1 cheque was years before the alleged closing of hire purchase transaction, by remittance of outstanding balance sum in the year 2000, as deposed to by the manager of the company (DW5), it appears, was not taken notice in making such assumptions. On the views so formed, the respective courts have concluded that the materials produced by the accused are insufficient to rebut the presumption under Section 139 of the N.IAct. CRRP.290/02 14 9. In the facts and circumstances presented in the case, it will be appropriate and profitable to take note of the decisions rendered by the apex court in Narayana Menon v. State of Kerala (2006 (3) KLT 404 (SC)) and Krishna Janardhan Bhat v. Dattatraya Hegde (2008 (1) KLT 425 (SC)). Both of which give an insight as to the extent of burden cast upon the accused to rebut the presumption arising under Section 139 of the N.I.Act. In Narayana Menon v. State of Kerala (2006 (3) KLT 404 (SC)), it has been observed thus: “For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on records but also by reference to the circumstances upon which he relies.” In Krishna Janardhan Bhat v. Dattatraya Hegde (2008 (1) KLT 425 (SC)), reiterating the proposition referred to above in appreciating the defense evidence let in CRRP.290/02 15 by the accused to rebut the presumption under Section 139 of the N.I.Act, the apex court has observed thus: “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 the accused and that of the prosecution in a criminal case is different. Furthermore, whereas prosecution must prove the guilt of the accused beyond all reasonable doubt, the standard of proof so as to prove a defense on the part of an accused is 'preponderance of probabilities'”. In the above decision, observing that the presumption under Section 139 of the N.I.Act drawn in favour of the drawee named in the instrument or the holder in due course 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 CRRP.290/02 16 like India the apex court has cautioned that the provision does not mean that the courts shall put a “blind eye to the realities”. Going further on the presumptive value to be attached under Section 139 of the N.I.Act, the apex court has observed that the aforesaid Section “does not say how presumption drawn should be held to have rebutted. The other important principles of legal jurisprudence, namely, presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 of the N.I.Act 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.” (emphasis supplied). Such being the law laid down by the apex court, the materials produced in the case with reference to the proved facts and circumstances involved have to be appreciated to examine whether the statutory presumption has been rebutted or not in the case, if so rebutted by the accused showing that his defense version is probable has the complainant proved the transaction giving rise to the cheque and that it CRRP.290/02 17 was issued in discharge of a debt or liability. 10. I find both the courts below have misread and misappreciated the materials tendered in the case and the conclusions formed by the respective courts as indicated are totally erroneous and unsustainable under law and facts. One material circumstance borne out by the records would give considerable mileage to the defense canvassed by the accused that his version is more probable and deserves acceptance. DW5 is the Manager of the General Finance Company. He was examined before the court on 16.2.2001. He would state that the hire purchase transaction with the accused was settled on 30.3.2000 by remittance of a sum of Rs.82,530/-. It is interesting to note what he would state was the remittance of Rs.82,530/- was made in the register on 30.3.2000. The loan transaction by repayment by instalment, according to him, should have been completed on 25.8.1997. The accused had remitted only five instalments before that date and the loan remittance for the entire outstanding sum was on 30.3.2000. Ext.D5 is the ledger extract produced. Perusal of CRRP.290/02 18 Ext.D5 shows there was a caution deposit of Rs.4,800/- in the loan transaction and it was adjusted in the outstanding amount due and after lessening the hire purchase charges of Rs.15,770/- and also the caution deposit refund of Rs.4,800/- an outstanding amount of Rs.82,530/- was remitted and the transaction was closed as per the entries in Ext.D5. An entry made in Ext.D5 register that there was remittance of Rs.82,530/- in the given facts of the case is not at all sufficient to show that the accused who had raised a defense even before the filing of the complaint under his reply notice during the course of the trial went to the company and remitted the balance outstanding amount on the hire purchase transaction. A mere entry put in the ledger as to the remittance of Rs.82,530/- and closing of the hire purchase transaction when the accused persisted that with the defense and summoned the Manager of that company to give evidence producing the ledger was not given any weightage or consideration by both the courts below in forming a conclusion that the loan was settled by repayment. Evidently, a false entry was recorded in the ledger by the company to show that the transaction was CRRP.290/02 19 settled and the account closed. Ext.D5 produced by the company with the entry thereof showing that the entire outstanding amount on the transaction with the accused was settled by remittance of the outstanding sum of Rs.82,530/- bristles with suspicion especially when the company has no case that it has proceeded against the accused after the default in instalment payment. It has also no case that any demand was made to the accused for remittance of the defaulted sum. Evidently, the company chose the easy way to prosecute the accused on one of the cheques collected as security through a name lender. The complainant issued a notice by one advocate, after dishonour of the cheque, and filed the complaint through another advocate, probably, had no role in issuing of the notice. The defense version canvassed by the accused in the given facts and circumstances appears to be probable in the backdrop of the evidence of the complainant, who admitted that he is a worker in a timber depot drawing daily wages, with average monthly earnings of Rs.5,000/-. His claim of engagement in timber sales is hardly susceptible. CRRP.290/02 20 11. Both the courts below have taken a view that once a signature in the cheque is admitted and it has been drawn from the account of the accused, the presumption under Section 139 of the N.I.Act would apply with full force irrespective of the defense canvassed by the accused that he had no transaction with the complainant and the cheque had been given to another as security. 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. The execution of the instrument is not a physical act of signing the instrument but of drawing that instrument with the intend to do so. Signature of a drawer in a negotiable instrument can be obtained even keeping him under duress exercising coercion and undue influence. No doubt, there will be cases of obtaining blank signed cheques as security for loan transaction. In such a case mere signing of the instrument cannot be considered as execution of the instrument. But of CRRP.290/02 21 course where the instrument is admitted as duly signed but a defense is canvassed that it was obtained by fraud, deceit, coercion or whatever reasons indicating unconscionably of the transaction, no doubt, a burden is cast on the accused to place materials substantiating his defense 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 producing materials or from the circumstance presented in the