JUDGMENT

Dated this the 7^th day of August, 2026

Complainant in C.C.No.2079/2015 on the files of the Temporary Special Court (the Judicial Magistrate of First Class) for the trial of cases under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘NI Act’ for short), Thiruvananthapuram, has filed this criminal appeal under Section 378(4) of the Code of Criminal Procedure (hereinafter referred to as ‘Cr.P.C.’), after getting the leave of this Court. The 1^st respondent herein is the accused before the trial court and the 2^nd respondent is the State of Kerala, represented by the Public Prosecutor.

2. Heard the learned counsel for the complainant/appellant and the learned counsel for the 1^st respondent/accused. Perused the trial court records.

3. I shall refer the parties in this appeal as 'complainant' and 'accused' for easy reference.

4. Consequent to dishonour of cheque, (when the cheque presented for collection the same returned with endorsement, “payment stopped by drawer”) bearing No.140482, dated 28.01.2013, for ₹7,00,000/- (Rupees seven lakh only), alleged to be issued by the accused to the complainant, the complainant launched prosecution, alleging commission of offence punishable under Section 138 of the NI Act by the accused, when the accused failed to repay the same on demand.

5. The learned Magistrate took cognizance of the offence punishable under Section 138 of the NI Act. During trial, PW1 was examined and Exts.P1 to P5 were marked on the side of the complainant. After questioning the accused under Section 313(1)(b) of Cr.P.C., when opportunity was provided to the accused to adduce defence evidence, the accused himself got examined as DW1, and Exts.D1 to D7(a) were tendered in evidence through him.

6. On appreciation of evidence, the learned Magistrate found that the complainant failed to prove beyond doubt that he was the holder of the cheque entitled to its possession in his own name and receive the money thereunder. Accordingly, relying on doubtful circumstances, the learned Magistrate found that the complainant failed to prove his case beyond doubt to get the benefit of presumptions under Sections 118 and 139 of the NI Act. Consequently, the accused was acquitted.

7. The learned Magistrate relied on the decision of this Court in Basalingappa Vs. Mudi Basappa, reported in 2019(2) KHC 451, to hold that when financial capacity of the complainant would be questioned, it was incumbent upon the complainant to explain his financial capacity.

8. Similarly, another decision of the Apex Court in M.S.Narayana Menon Vs. State of Kerala and Another reported in 2006 SC 336 was also relied on by the learned Magistrate to hold that “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 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”.

9. Apart from the same, the learned Magistrate held in paragraph No.9 as under:

“9. According to accused he borrowed ₹2,35,000/- from the complainant in 2011. And he issued two blank signed cheque in that transaction as security. Definite case of the accused was that on the cheque date 28.1.2013 he had no transaction with the complainant. In the decision in G. Gopan V. Tonny Varghese and another 2008(1) KLT 257 Hon'ble High Court held that merely because the cheque contained the signature of the accused, it cannot be said that the cheque was drawn by accused as contemplated under section 138 of Negotiable Instruments Act. It was further held that when execution itself is not proved by the complainant, the presumption under section 139 is not available to him. In Jose Vs P.C. Joy 2008(3) KLT 512 Hon'ble High Court held that the probability of the prosecution case does not depend on