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IN THE HIGH COURT OF KERALA AT ERNAKULAM
A. Badharudeen, J.
Shabir Ali, S/o. Abdul Latheef – Petitioner
Versus
S.Ramesh and Ors. – Respondents
CRL.A No. 732 of 2013
Decided On : 05-06-2025
(A) Negotiable Instruments Act, 1881 - Section 138 - Criminal Procedure Code, 1973 - Section 374 - Dishonour of cheque - Complainant alleged that cheque issued for a legally enforceable debt was dishonoured - Trial court convicted accused, but appellate court acquitted him citing insufficient evidence - Court found that the appellate court erred in its assessment of evidence and the presumptions under Sections 118 and 139 of the NI Act - The trial court's conviction was reinstated with modified sentencing. (Paras 6, 11, 15, 16)
(B) Presumptions under NI Act - The onus to rebut the presumption that a cheque was issued in discharge of a debt lies with the accused, and mere suggestions during cross-examination do not suffice to negate the complainant's case. (Paras 12, 14)
Facts of the case:
The complainant lent Rs.2,75,000/- to the accused, who issued a cheque for the same amount, which was later dishonoured. The trial court convicted the accused, but the appellate court acquitted him, leading to this appeal.
Findings of Court:
The appellate court's reasoning was flawed, and the trial court's conviction was justified based on the evidence presented.
Issues: Whether the appellate court was justified in reversing the trial court's finding and whether interference in the appellate court's judgment was warranted.
Ratio Decidendi: The court emphasized that the trial court correctly appreciated the evidence, and the appellate court's reliance on technicalities was misplaced. The presumption under the NI Act was not adequately rebutted by the accused.
Result: Appeal allowed; the judgment of acquittal set aside; accused convicted under Section 138 of the NI Act.
JUDGMENT :
A. Badharudeen, J.
The complainant in C.C. No. 281 of 2011 on the files of the Special Judicial First Class Magistrate Court (Marad cases), Kozhikode, has led this appeal under Section 374 of the Code of Criminal Procedure, challenging the judgment in Crl.Appeal No.861 of 2011 dated 01.03.2012 on the files of the Sessions Court, Kozhikode Division arising from judgment in C.C. No. 281 of 2011 dated 01.12.2011 on the files of the Special Judicial First Class Magistrate Court, Kozhikode.
2. The 1st respondent is the accused before the trial court and the appellant before the Sessions court. The 2nd respondent is the State of Kerala.
3. Heard the matter in detail. Perused the records and the judgments rendered by the trial court as well as the appellate court.
4. For effective and easy discussion, the parties in this appeal will be referred to as ‘complainant’ and ‘accused’ hereafter.
Short facts:-
5. On dishonour of cheque dated 09.04.2011 for Rs.2,75,000/- drawn on Punjab National Bank issued by the accused in favour of the complainant for a legaly enforceable debt, the complainant lodged complaint before the trial court alleging commission of offence punishable under Section 138 of the Negotiable Instruments Act (for short, “the NI Act”).
6. The trial court recorded evidence confined to that PW1 and Exts.P1 to P7 on the side of the complainant. Even though opportunity was provided to the accused to adduce defence evidence after questioning him under Section 313(1)(b) of Cr.P.C ., he did not adduce any evidence. On appreciation of evidence, learned Magistrate found that the accused was guilty for the offence punishable under Section 138 of the NI Act, and accordingly, he was sentenced to undergo imprisonment till rising of the court, and to pay compensation of Rs.2,75,000/-, and sixty days default imprisonment for non payment of compensation also was imposed.
7. The accused challenged the verdict of the trial court before the court of Session, Kozhikode, as per judgment dated 01.03.2012 in Crl. Appeal No. 861 of 2011, the appellate court reversed the said finding and acquitted the accused.
8. While supporting the judgment of the trial court and impeaching the veracity of the finding of the appellate court, the learned counsel for the complainant argued that in this matter, the accused and the complainant are friends and worked together in the Orange O set printing press, Kozhikode. While so, the accused demanded some amount for the treatment of his father and also to clear his debt. Accordingly, the complainant given Rs.2,75,000/- on 10.06.2010, and the accused executed Ext.P1 agreement dated 10.06.2010 acknowledging the said amount. Later, Ext.P2 cheque dated 09.04.2011 for Rs.2,75,000/- of Punjab National Bank also was issued in discharge of the said liability. It is argued by the learned counsel for the complainant that the complainant examined himself as PW1 and proved the transaction that led to the execution of Ext.P2 cheque as well as Ext.P1 agreement. Thus on appreciation of evidence, the trial court convicted the accused, but the appellate court acquitted the accused on finding lacuna in the evidence of PW1, in a case where PW1 was not even effectively cross-examined to dispute the transaction. According to the learned counsel for the complainant, mere failure to deny the suggestion that the entries in the cheque were made by the complainant is the sole reason whereby the appellate court found that the case of the complainant was not proved by PW1. According to the learned counsel for the complainant, the appellate court did not correctly appreciate the evidence where twin presumptions under Sections 118 and 139 of the NI Act is available in favour of the complainant. Therefore, the judgment of acquittal rendered by the appellate court negating the finding of the trial court is patently wrong, and the same would require interference.
9. Whereas the learned counsel for the accused supported the verdict of the appellate
The presumption under Sections 118 and 139 of the NI Act requires the accused to prove that the cheque was not issued in discharge of a debt, and mere suggestions during cross-examination do not suff....
The presumption under Sections 118 and 139 of the NI Act requires the accused to prove that the cheque was not issued in discharge of a debt, and mere suggestions during cross-examination do not suff....
The court reaffirmed that the burden to rebut the presumption under Section 139 of the Negotiable Instruments Act lies with the accused, and a signed blank cheque can still be valid if issued towards....
The court emphasized that the presumption under Section 139 of the NI Act requires the accused to rebut the claim that a cheque was issued in discharge of a debt, regardless of who filled it out.
The court reaffirmed that the burden of proof lies on the accused to disprove the presumption of liability under Section 139 of the Negotiable Instruments Act.
A signed cheque establishes a presumption of liability; the accused must provide evidence to rebut this presumption to avoid conviction under Section 138 of the Negotiable Instruments Act.
The signed blank cheque carries a legal presumption of liability under the Negotiable Instruments Act, shifting the burden of proof to the accused to demonstrate non-liability.
The presumption of validity of a cheque under Section 139 of the NI Act remains unless the accused provides cogent evidence to rebut it.
The presumption of validity of a cheque under Section 139 of the NI Act remains unless the accused provides cogent evidence to rebut it.
A signed cheque creates a presumption of liability in favor of the payee, where the accused must prove otherwise to avoid conviction under Section 138 of the Negotiable Instruments Act.
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