Ravidas vs Anandkumar

C. S. Dias, J

The revision petitioner calls in question the correctness and legality of the judgment of the Court of the Additional Sessions Judge (Fast Track Court-III), Thiruvananthapuram (Appellate Court) in Crl.Appeal No.197/2008, confirming the judgment of the Court of the Judicial Magistrate of First Class-IX, Thiruvananthapuram (Trial Court) in S.T.No.199/2005, convicting and sentencing the revision petitioner for the offence under Section 138 of the Negotiable Instruments Act (for brevity, “N.I.Act”). The revision petitioner was the accused and the 1st respondent was the complainant before the Trial Court.

The facts in brief:

The first respondent had filed the complaint before the Trial Court alleging that the revision petitioner had issued Ext P1 cheque in discharge of a legally enforceable debt. The cheque, on presentation to the bank for collection, was dishonoured by Ext.P2 memorandum due to ‘insufficient funds’ in the account of the revision petitioner. Although Ext P3 statutory lawyer notice was issued to the revision petitioner, he failed to pay the demanded amount. Hence, the revision petitioner had committed the offence under Section 138 of the N.I.Act.

Trial

The revision petitioner pleaded not guilty to the substance of accusation read over to him. In the Trial, the first respondent was examined as PW1 and Exts.P1 to P5 were marked in evidence. The revision petitioner denied the incriminating circumstances that were put against him in the questioning under Section 313 of the Code of Criminal Procedure ( in short, Cr.P.C’). The revision petitioner did not let in any defence evidence.

Trial Court Judgment

The Trial Court, after analysing the materials on record, convicted the revision petitioner for the offence under Section 138 of the N.I.Act and sentenced him to undergo simple imprisonment for a period of six months and to pay a fine amount of Rs.2,00,000/- and in default to undergo simple imprisonment for a further period of three months. If the fine amount was realised, the same to be paid to the first respondent as compensation as provided under Sec.357(1) of the Cr.P.C.

Aggrieved by the said judgment, the revision petitioner filed Criminal Appeal No.197/2008 before the Appellate Court.

Appellate Court judgment

The Appellate Court, after re-appreciating the materials on record, by the impugned judgment, confirmed the conviction, but modified the sentence by sentencing the revision petitioner to undergo simple imprisonment for a day (till the rising of Court) and to pay a compensation of Rs.2,00,000/- and in default to undergo simple imprisonment for a further period of three months.

It is assailing the concurrent judgments passed by the courts below, the revision petition is filed.

When the revision petition came up for consideration on 26.7.2012, this Court issued notice before admission by speed post to the first respondent. This Court directed warrant, if any, to be kept in abeyance subject to the condition that the revision petitioner deposits an amount of Rs.60,000/- before the Trial Court within a period of one month.

Today, when the revision petition was taken up for consideration, the learned counsel appearing for the first respondent submitted that the revision petitioner has not complied with the order dated 26.7.2012 passed by this Court.

Heard; Sri.Anil P.V, the learned Counsel appearing for the revision petitioner; Sri.D.Sajeev, the learned Counsel appearing for the first respondent and Smt.M.K Pushpalatha, the learned Senior Public Prosecutor appearing for the second respondent.

The point is whether there is any error or illegality in the impugned judgments passed by the courts below warranting this revision petition to be admitted and decided on merits.

The first respondent’s case is that the revision petitioner had issued Ext P1 cheque in discharge of a legally enforceable debt. The cheque, on presentation to the bank for collection, was dishonoured due to ‘insufficient funds’ in the account of the revision petitioner. Although a statutory lawyer notice was issued, the revision petitioner did not pay the demanded amount or issue any reply notice. Hence, he has committed the offence.

The revision petitioner’s defence was that he had not issued Ext P1 cheque to the first respondent. Instead, he had issued Ext P1 cheque to his uncle in connection with a business transaction as security. It is his uncle who handed over the cheque to the first respondent. Therefore, Ext P1 cheque  cannot  be  said  to  be  issued  towards  a  legally enforceable debt.

A negotiable instrument, which includes a cheque, carries the presumption of consideration under Secs.118(a) and 139 of the N.I Act. It is profitable to extract the said relevant provisions:

“118. Presumptions as to negotiable instruments – Until the contrary is proved, the following presumptions shall be made;-

(a) of consideration-that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

Presumption in favour of holder. —It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, of any debt or other liability”.

A three-Judge Bench of the Hon’ble Supreme Court in Rangappa vs. Sri.Mohan [2010 KHC 4325], while dealing with Sec.139 of the N.I Act has conceptualised the doctrine of ‘reverse onus’, by holding thus:

“ 18. In light of these extracts, we are in agreement with the respondent - claimant that the presumption mandated by S.139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. S.139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While S.138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under S.139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by S.138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused / defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under S.139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his / her own.

Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the 'stop payment' instructions to his bank. Furthermore, the instructions to 'stop payment' had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under S.138 of the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant - accused was not able to contest the existence of a legally enforceable debt or liability. The fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction – related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction - expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant”.

Recently, a three-Judge Bench of the Hon’ble Supreme Court in Kalamani Tex and Anr vs. P. Balasubramanian [2021 (2) KHC 517] has reiterated the legal position and doctrine of the reverse onus. It is apposite to extract the relevant paragraphs, which declares the law on the point in the following terms:

“14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature (s) of an accused on the cheque/negotiable instrument are established, then these ‘reverse onus’ clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystalized by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat (2019 (2) KHC 243).”

In Rangappa (supra), the Honourable Supreme Court has held that, once a cheque is dishonoured, a reverse onus of proof is cast on the accused under Section 139 of the N.I.Act. If the accused fails to reply to the statutory lawyer notice issued by the complainant under Section 138 of the N.I.Act, then an inference has to be drawn in favour of the complainant that the cheque was issued towards a legally enforceable debt.

Similarly, in Kalamani Tex (supra), the Honourable Supreme Court has held that even if a blank cheque leaf is voluntarily signed and handed over by the accused towards some payment, the statutory presumption under Section 139 of the N.I.Act cannot be obliterated.

In the case at hand, indisputably, the revision petitioner has not send any reply notice to Ext P3 lawyer notice. The revision petitioner has also not mounted the box and let any defence evidence. Therefore, the revision petitioner has miserably failed to prove the reverse onus of proof that is casted on him under Sec.139 of the N.I Act. I do not find any error or illegality in the concurrent findings of the courts below warranting this revision petition to be admitted at this point of time, especially after the revision petitioner has failed to comply with the interim order dated 26.7.2012. The revision petition is devoid of any merits and is consequentially dismissed.

The Registry is directed to forward a copy of the judgment to the Trial Court for execution of sentence.