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2026 Supreme(Ker) 1032
IN THE HIGH COURT OF KERALA AT ERNAKULAM
A. BADHARUDEEN, J.
Sindhu S. Nair – Appellant
Versus
Shyni Anoop – Respondent
Crl.A No. 37 Of 2018
Decided On : 06-07-2026
Important Points
Subject
Criminal Law - Negotiable Instruments Act
Act Referred
CRIMINAL PROCEDURE CODE : S.357(1)(b)
Headnote
(B) Evidence - Presumptions - Sections 118 and 139 of the Negotiable Instruments Act - Once the complainant proves the signature and the issuance of the cheque, the statutory presumption of a legally enforceable debt arises in favour of the holder - The burden then shifts to the accused to rebut this with a probable defence. (Paras 6, 20)
(C) Appellate Procedure - Scope of interference - Where the trial court has misappreciated evidence and failed to follow settled legal principles regarding the burden of proof, the appellate court is empowered to interfere with an order of acquittal. (Paras 18, 20)
Facts of the case:
An appeal was filed by the complainant challenging the acquittal of the accused in a case involving a dishonoured cheque issued for repayment of a borrowed amount. The trial court had granted acquittal relying on the failure of the complainant to specifically mention the nature of the transaction in the statutory notice. The appellant contended that the trial court erred in its reliance on overruled legal precedents regarding the necessity of disclosing transaction details in such notices.
Findings of Court:
The court held that the trial judge incorrectly relied on a precedent that had been overruled. It further noted that the defense failed to establish a credible case, as the claims regarding a business partnership were unsubstantiated by documentation and were inconsistent with the contents of the initial reply notice sent by the accused.
Issues: The main issues addressed were whether the omission to disclose the nature of the financial transaction in the statutory notice makes it invalid and whether the accused successfully rebutted the statutory presumptions through a probable defense.
Ratio Decidendi: The law does not mandate that the nature of the transaction be explicitly stated in the statutory notice under the Act. Upon the complainant establishing the basic requirements for the offence, the burden shifts to the accused. A defense that is contradictory to the initial reply notice and lacks documentary support is insufficient to rebut the statutory presumptions of liability.
Result: Appeal allowed. The accused was convicted and sentenced to imprisonment until the rising of the court and ordered to pay compensation.
For The Appellant : By Adv Sri.Sanil Jose
For The Respondent: Advs., Shri.Mohan Jacob George, Smt.Nigi George, Smt.P.V.Parvathy (P-41), Smt.Reena Thomas
| Table of Content |
|---|
| 1. procedural background and trial history leading to the appeal. (Para 2 , 3 , 4 , 5) |
| 2. arguments and counter-contentions regarding the alleged transaction and defense. (Para 6 , 7 , 8 , 11) |
| 3. evidentiary assessment and credibility of testimonies presented by both parties. (Para 10 , 12 , 14 , 16 , 17 , 18 , 19) |
| 4. application of ni act presumptions and overturning of the divakaran precedent. (Para 13 , 15 , 20) |
JUDGMENT :
A. BADHARUDEEN, J.
This appeal is at the instance of the complainant in S.T. No.10/2017 on the files of the Judicial First Class Magistrate Court-II, Changanacherry. The 1st respondent herein is the sole accused in the complaint and the 2nd respondent herein is the State of Kerala represented by the learned Public Prosecutor. The appellant assails judgment dated 25.08.2017 in the above case.
2 . Heard the learned counsel for the appellant/complainant, the learned counsel appearing for the accused/1st respondent and the learned Public Prosecutor for the 2nd respondent, in detail. Perused the verdict impugned and the evidence available.
3. The complainant launched prosecution alleging commission of offence punishable under Section 138 of the Negotiable Instruments Act (for short 'N.I Act'), by the accused when cheque for Rs.7,00,000/- issued by the accused in favour of the complainant to clear her liability to the tune of Rs.7,00,000/- alleged to be borrowed by the accused from the complainant got dishonored and when the accused failed to repay the same even on demand.
4. The learned Magistrate took cognizance of the matter and proceeded with the trial. During trial, PW1 and PW2 were examined and Exts.P1 to P10 were marked on the side of the prosecution. On the side of the defence, DW1 and DW2 were examined.
5. On appreciation of evidence, the learned Magistrate relied on the ratio of the decision of this Court in Divakaran v. State of Kerala [2016 (4) KLT 233] to record acquittal of accused/1st respondent, among other reasons.
6. While challenging the verdict impugned, it is pointed out by the learned counsel for the complainant/appellant that apart from the evidence of PW1, PW2, the brother of PW1 also was examined by the complainant to prove that the amount borrowed by the accused from the complainant was given by PW2 on withdrawing the same from his bank account as evident from Ext.P8 statement of accounts. Therefore, the complainant discharged her initial burden of proving the transaction and execution of Ext.P1 cheque through the evidence of PW1 and PW2 as well as Exts. P1 to P6 to avail the presumptions under Sections 118 and 139 of the N.I.Act in her favour. It is also submitted that Divakaran's Case (Supra) was over ruled by the Division Bench of this Court in Basheer K. v. C.K.Usman Koya [2021 (2) KHC 432] and held that material particulars and the nature of the transaction must be explicitly stated in the statutory notice and complaint in Section 138 cases-was “not good in law”. The Division Bench held that the mere omission to state the nature of the transaction does not render the statutory notice invalid or warrant the automatic acquittal of the accused. Therefore, the acquittal, relying on the said decision would require interference.
7. The learned counsel for the 1st respondent/accused supported the verdict and argued that when the transaction and execution of Ext.P1 cheque failed to be proved by the complainant and the evidence of PW1 and PW2 are quite insufficient to prove the case of the complainant, even ignoring the ratio in Divakaran's Case (Supra), the acquittal is liable to be confirmed. According to the learned counsel for the accused/1st respondent, insofar as handing over of Rs.7,00,000/- by PW2 in favour of PW1, no evidence adduced by the complainant. Although Ext.P8 statement of account was tendered in evidence through PW2 showing the withdrawal of Rs.9,00,000/- by him on the date of the transaction, it is argued by the learned counsel for the accused/1st respondent that th
