Cheque; N.M. Yohannan Vs. P.N. Sabu [Kerala High Court, 16-02-2012]

Negotiable Instruments Act, 1881 – Section 138 – A mere failure to send a reply to the statutory notice will not give rise to a presumption that the case advanced by the accused during cross examination of the complainant should be totally disbelieved or that the failure to send a reply would tantamount to proof of execution of the cheque.

# Cheque

# 2012 (3) KLT SN 31 (C.No.32) : 2012 (2) KHC 761

IN THE HIGH COURT OF KERALA AT ERNAKULAM

N.K. BALAKRISHNAN, J.

Crl. A. No: 2253 OF 2005 (F)

Dated this the 16th day of February, 2012

AGAINST THE ORDER/JUDGMENT IN CRLP.670/2005 DATED 23-11-2005 ST.480/2004 of J.M.F.C.,SULTHANBATHERY

APPELLANT(S)/COMPLAINANT

N.M. YOHANNAN

BY ADV. DR.GEORGE ABRAHAM

RESPONDENT(S)/ACCUSED

P.N. SABU

R1 BY ADVS SRI.V.RAJENDRAN (PERUMBAVOOR) SRI.GEORGE VARGHESE KIZHAKKAMBALAM R2 BY PUBLIC PROSECUTOR SRI.SREEJITH V.S.

J U D G M E N T

The complainant is the appellant. He filed the complaint against the first respondent (herein after referred to as respondent) alleging offence under Section 138 of N.I. Act. Ext.P1 is the cheque dated 08/10/2003 for Rs. 4 lakhs drawn on the Co-operaive Urban Bank, Kenichira branch. The appellant contended that Ext.P1 was issued by the respondent to discharge a legally enforceable liability. When presented for encashment, it was returned dis- honoured on the ground of insufficiency of funds. Statutory notice was sent to the respondent which was acknowledged by him but no reply was sent. The amount was also not paid. Hence the complaint was filed.

2. The complainant got himself examined as PW.1 and the Manager of the bank was examined as PW.2. Exts. P1 to P.8 were marked. The learned Magistrate after thorough scrutiny of the evidence found that Ext.P1 cheque is in such a condition that it cannot be compared with the admitted signatures of the accused, due to the spreading of ink in that portion. It was contended by the defence that the signature purported to be of the accused found on Ext.P1 was different from the signature of the accused seen in Ext.P7, the account opening form and Ext.P8, the specimen signature card which were proved by PW.2. Considering all the aspects, the learned Magistrate acquitted the accused.

3. The learned counsel for the complainant submits that, the learned Magistrate was not justified in holding that the signature found on Ext.P1 was not proved to be that of the accused. It is argued that when Ext.P1 was presented for collection it was bounced only on the ground of insufficiency of funds and not on the ground of difference in signature of the drawer. The evidence given by PW.2 , the bank Manager has been relied upon by the complainant in support of his contention that when a cheque is presented for encashment, first of all, the date and signature found on it would be verified and on such verification if the signature was found to be different, it would be dishonoured on that ground. Therefore, the learned counsel for the appellant would submit that since no such ground for dishonour of Ext.P1 cheque was mentioned, it has to be held that there was no difference in the signature of the accused. But that submission is countered by the learned counsel who would submit that when Ext.P1 was presented for collection PW.2 was not there in the bank and so he could not have direct knowledge regarding dishonour of Ext.P1 cheque. It is also pointed out that, when Ext.P1 was shown to him to state whether the signature in the specimen card and the account opening form are different or not, only an evasive answer was given by him. That showed that he was disinclined to tell the truth. The difference or vagueness of the signature due to spreading of ink is so loudly obtrusive that PW2 was not expected to give such an evasive answer. Therefore, relying upon the evidence given by PW.2 alone, it cannot be held that there is no difference in the signature found on Ext.P1 cheque. It was admitted by PW.2 that he does not know whether the signature in the cheque was compared when Ext.P1 was presented for collection.

4. When PW2 was in the witness box, the complainant had no case that there was any standing instruction or rules issued by the Reserve Bank of India or by any other bank that when a cheque is presented, the first thing to be done was to compare the signature appearing on the cheque with the signature in the account opening form or the specimen signature card available with the bank. It is submitted by the learned counsel for the accused that usually the bank officials, instead of taking the task of comparing the signatures, used to adopt the easy method to find whether there is sufficient amount standing to the credit of the account of the drawer so as to honour the cheque and if the amount is not sufficient to honour the cheque, the cheque used to be returned for the reason ‘insufficiency of funds’. Officers may adopt different methods. So long as there is no rule which says that whenever there is difference in the signature that should be noted first, the opinion expressed by PW2 cannot be annexed with any importance. The further fact that PW2 was disinclined to tell the truth that the signature found on Exhibit P1 cheque is blurred and that the spreading of ink would compel the banker to dishonour the cheque. Therefore, the court below was perfectly justified in not placing reliance on the evidence of PW2.

5. It was stated by PW1 that the accused had borrowed from him ₹4,00,000/- on 5.7.2003, agreeing to repay the same within three months. But the amount was not paid and so when demanded, the accused issued Exhibit P1 cheque dated 8.10.2003 for the said amount of ₹4,00,000/-. It was not stated by PW1 in evidence that anybody else has witnessed the borrowal of money by the accused. During cross examination it was stated by PW1 that at the time when money was lent, accused was having Abkari business and that the accused was running a toddy shop, but he could not give the details of the same. He also stated that he was not aware of the assets of the accused at that time.

6. It was admitted by him that as earlier demanded, the accused brought a cheque and handed it over to him. But that fact was not mentioned in the affidavit filed in lieu of the chief examination or in the complaint filed by him. He has further admitted that it was a filled up cheque which was brought by the accused and that he did not see the accused signing Exhibit P1 cheque. The specific case put forward by the defence is that the signature found on Exhibit P1 was not that of the accused.

7. It is pointed out by the learned counsel for the accused that a cursory glance of Exhibit P1 would itself make it clear that the date, the name of the payee and the amount were written by a different pen by a different person, at a different point of time and that subsequently signature therein was put by somebody at a different point of time. The ink on the signature portion of Exhibit P1 is seen spread, not only on the obverse but on the reverse also. It appears that in an old cheque leaf signature was put just on the lieu of presentment of the same.

8. Arguments were addressed at length to the effect that since the bank officer did not mention in Exhibit P2 that it was not possible to honour the cheque because the signature was not decipherable or is not identical to the signature of the drawer furnished in the account opening form and the specimen signature card, the accused cannot contend that at the time of issuance of Exhibit P1 there was spreading of ink. But PW1 has not offered any explanation as to how the signature, purported to be of the accused, found in Exhibit P1 is seen indecipherable due to spreading of ink. The contention that drop a of water must have fallen at that portion of Exhibit P1 accidentally, causing the signature to appear blurred in that fashion cannot be accepted at all. There was no such case for the defence. It is evident that signature was put at a different point of time using a different pen and that has caused spreading of ink.

9. Since PW1 himself admits that he did not see the accused signing Exhibit P1 cheque, it cannot be held that there is proof of due execution of Exhibit P1. Simply because the cheque leaf issued by the bank on the account of the accused happened to be in the possession of the complainant, it cannot be held that the burden shifts on to the accused to produce evidence to improbabilise the case of execution of the cheque put forward by the complainant. When PW1 himself admits that he did not see the accused signing Exhibit P1 and since no other witness was examined to prove that it was signed by the accused and that it was handed over by the accused to the complainant, the defence is legitimate in its contention that adduction of evidence on the side of the accused would arise if only there was prima facie evidence of execution of Exhibit P1 cheque by the accused. When that evidence is totally absent, the question of adducing evidence to disprove the case of the accused does not arise at all.

10. The contention advanced by the accused when PW1 was in the witness box was that this case was foisted with the help of one ‘Sivan Master’, who is stated to be the co-brother of PW1 and that the signed blank cheque leaf which was with Sivan Master was utilized to file the complaint. Since there is dearth of evidence regarding execution of Exhibit P1 it is not necessary to probe further into the case set up by the accused. In such circumstances failure to send a reply to the statutory notice cannot tilt the balance in favour of the complainant. Though, failure to send a reply to the statutory notice may be a circumstance in favour of the complainant, the Court cannot jump to a conclusion that because of the accused’s failure to send a reply, the case set up by the complainant has to be accepted as true. The failure to send reply notice has to be appreciated while considering the totality of the evidence and circumstance available in a particular case. There is no rule that a mere failure to send a reply to the statutory notice will give rise to a presumption that the case advanced by the accused during cross examination of the complainant should be totally disbelieved or that the failure to send a reply would tantamount to proof of execution of the cheque.

11. PW1, the complainant himself did not see the accused filling up the cheque or signing thereon. No other witness was examined to prove the due execution of the cheque or the passing of consideration. No evidence was adduced on the side of the complainant to prove the actual lending of money or as to how that much money was raised by the complainant so as to lend the same to the accused.

12. The decision of the Bombay High Court in

# M/S. P.V. CONSTRUCTIONS Vs. SHRI. K.J. AUGUSTY, 2007 CRI. L. J. 154

is totally inapplicable to the facts of this case because that was a case where the complainant asserted that the cheque was given to him by the accused duly signed, whereas, in this case the admitted case is that the complainant did not see the cheque being written or signed by the accused. It is true that the accused did not send any reply stating how his cheque leaf happened to reach the hands of the complainant. But on the evidence available on record that conduct of the accused cannot give help to the complainant to contend that there is proof of due execution of the cheque. Though silence or non explanation by the accused of certain circumstances may be a factor in favour of the complainant while weighing and analising the evidence, it cannot tilt the balance when there is total absence of the evidence touching upon the execution of the cheque.

13. The decision in

# SEENATH V. JOYSON, 2012 (1) KLT 32

was also cited by the learned counsel for the complainant to buttress his submission that even if the cheque, when produced before Court, was in a mutilated condition, still action under section 138 of N.I. Act can very well be maintained. The facts dealt with in that case also are entirely different. That was a case where the complainant presented the cheque for encashment and it was dishonoured. When the accused was intimated about the factum of dishonour, he directed the complainant to meet him and to collect the amount from him. Believing the words, the complainant went over to the house of the accused and on demand by the accused the complainant showed the dishonoured cheque and then the accused snatched and caught hold of the portion of the cheque and destroyed it. In that case there was proof regarding execution of the cheque. The circumstances detailed above were strong enough to hold the case in favour of the complainant. That is not the fact situation of this case.

14. The decision of the apex Court in

# DELHI ADMINISTRATION Vs. SANJAY GANDHI [AIR 1978 SC 961]

was also referred to here, where it was held that proof of facts by preponderance of probabilities as in a civil case is not foreign to criminal jurisprudence. Though that was a case dealt with under the Prevention of Corruption Act, it was held that the accused is entitled to rebut that presumption by proving his defence by a balance of probabilities. It is also trite law that the onus of an accused to dislodge the presumption is not as heavy as that of the prosecution and that he can discharge that burden by preponderance of probabilities.

15. The learned counsel for the accused would submit that the only case on hand is that the execution of Exhibit P1 cheque has not been proved at all. The question of rebuttal does not actually arise since the presumption under section 118 and 139 of the N.I. Act would arise only when due execution of the cheque is proved.

16. It was held in

# V.D. JHINGAN V. STATE OF UTTAR PRADESH, [AIR 1966 SC 1762]

thus:

“It is well-established that where the burden of an issue lies upon the accused, he is not required to discharge that burden by leading evidence to prove his case beyond a reasonable doubt.”

This decision was followed by the Supreme Court in

# M.S. NARAYANA MENON ALIAS MANI V. STATE OF KERALA AND ANOTHER 2006 STPL (LE) 36912 SC

It was held therein:

“Even while exercising an appellate power against a judgment of acquittal, the High Court should have borne in mind the well-settled principles of law that where two views are possible, the appellate court should not interfere with the finding of acquittal recorded by the court below.”

17. Therefore, the learned counsel for the accused would submit that since the learned Magistrate has declined to accept Exhibit P1 as a true and valid cheque to be acted upon and when a perusal of Exhibit P1 it is so clear that it cannot be acted upon in view of the fact that the signature in it is seen indecipherable as the ink used for signing is seen spread on the said instrument, this Court will not be justified in reversing the judgment of acquittal.

18. I find no reason to upset the verdict of acquittal given by the Court below. In the result this appeal fails and is dismissed.

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