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John K. John v. Tom Varghese And Another
Factual and Procedural Background
The appellant (complainant), a partner in “Karappara Chitty Funds,” alleged that the respondent (accused) issued two cheques that were dishonoured for insufficiency of funds. The cheques were allegedly meant to discharge amounts due from the respondent, who had subscribed to three chitties conducted by the appellant’s firm and was also claimed to have taken a personal loan of Rs 1,00,000. When the respondent failed to make payment after statutory notice, the appellant filed two criminal complaints under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”).
The trial court convicted the respondent, and the conviction was affirmed by the appellate (Additional Sessions) court. On revision, however, a Single Judge of the Kerala High Court set aside the conviction, holding that the cheques were not proved to have been issued in discharge of any legally enforceable debt. The appellant challenged that decision before the Supreme Court.
Legal Issues Presented
- Whether the respondent had successfully rebutted the presumption under Section 139 of the NI Act that the dishonoured cheques were issued toward an existing debt or liability.
- Whether the High Court, in exercising revisional jurisdiction, was justified in reversing concurrent findings of conviction by the trial and appellate courts.
Arguments of the Parties
Appellant's Arguments
- The High Court exceeded its revisional jurisdiction in overturning concurrent findings of the lower courts.
- A statutory presumption under Section 139 arose because the respondent admittedly issued the cheques; absence of repayment should have led to conviction.
The opinion does not detail the respondent’s arguments before the Supreme Court.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| M.S. Narayana Menon v. State of Kerala (2006) 6 SCC 39 | Appellate/revisional courts should not interfere with an acquittal if two views are reasonably possible. | Invoked to support the High Court’s decision and to justify the Supreme Court’s reluctance to disturb an acquittal under Article 136. |
| Mahadeo Laxman Sarane v. State of Maharashtra (2007) 12 SCC 705 | Reiterates the principle that where two views are possible, an acquittal should not be overturned. | Cited as additional authority reinforcing the non-interference principle acknowledged by the Court. |
Court's Reasoning and Analysis
The Supreme Court noted that the parties’ relationship and the respondent’s default in chitty instalments were undisputed. Crucially, three civil suits for recovery of those amounts were already pending, making it improbable that the appellant would advance further sums without documentation or interest. The High Court was entitled to consider such circumstances and the testimonies of DW-1 and DW-2, which the trial court had discounted.
The presumption under Section 139 NI Act is rebuttable. The High Court found, on facts, that the respondent discharged this burden by showing it was unlikely the cheques related to any fresh loan. The Supreme Court held this finding was not perverse and squarely fell within the realm where “two views are possible.” Consequently, consistent with Narayana Menon and Mahadeo Laxman Sarane, the Court declined to interfere under Article 136 of the Constitution.
Holding and Implications
Appeals Dismissed; conviction set aside and respondent’s acquittal affirmed.
Immediate effect: the respondent stands acquitted of offences under Section 138 NI Act, and the High Court’s judgment is upheld. Broader implication: the decision reinforces that the presumption under Section 139 is rebuttable and that appellate or revisional interference with acquittals is limited, especially when competing factual views are reasonably possible. No new legal principle was established beyond reaffirming existing precedent.
S.B Sinha, J.— Leave granted.
2. The complainant is before us being aggrieved by and dissatisfied with a judgment and order dated 24-8-2005 passed by a learned Single Judge of the High Court of Kerala in Crl. RPs Nos. 2255 and 2256 of 2004 whereby and whereunder the judgment of conviction and sentence passed by the learned trial Judge and affirmed by the appellate court, was set aside.
3. The respondent allegedly issued two cheques in favour of the appellant herein. The said cheques when presented were dishonoured for want of insufficient funds. As despite service of notice, the respondent did not make any payment, two complaint petitions were filed against him.
4. The question which arose for consideration before the learned trial Judge and consequently before the court of appeal as also the revisional court was as to whether the said cheques had been issued towards discharge of any existing debt.
5. Relationship between the parties is not in dispute. The complainant used to run chitties. The respondent was a subscriber to three chitties conducted by the firm of the appellant. In respect of one of the chitties, the bid was held on 7-10-1997 for a sum of Rs 1,00,000. The amount was paid on 3-11-1997. Bid was again made by the respondent in relation to another chitty on 7-4-1998, for a sum of Rs 1,00,000. The amount was paid on 25-6-1998. Allegedly, the respondent committed defaults in payment of the instalments in relation thereto with effect from 7-4-1998.
6. Indisputably, a suit for realisation of the said amount was filed by the appellant against the respondent in the Court of the Subordinate Judge, Kottayam which was marked as OS No. 1 of 2000. Another suit being OS No. 168 of 2000 was instituted before the Munsif Court, Changancherry claiming a sum of Rs 55,900. The respondent, apart from the aforementioned two chitties, was a subscriber to another chitty for a sum of Rs 50,000. It was not prized by the respondent. On an allegation that the respondent along with three others had borrowed a sum of Rs 1,00,000 from him on 26-3-1998 wherefor he executed a demand promissory note and as despite demand, the said amount was not paid to him, the appellant instituted another suit being OS No. 362 of 1999 in the Subordinate Court, Kottayam for recovery of a sum of Rs 1,00,000 with interest.
7. The appellant herein admittedly was conducting chitty transactions in the name of a firm known as “Karappara Chitty Funds”. He is a partner of the said firm. The suits were instituted by him representing the said firm. The appellant contended that despite the fact that the respondent herein was a defaulted subscriber of two prized chitties, he took personal loan from him in his personal capacity.
8. Before the learned trial Judge, the respondent examined two witnesses who proved the aforementioned fact. The learned trial Judge, in his judgment, took notice of the pendency of the several civil litigations by and between the parties hereto. It, however, proceeded on the basis that as admittedly cheques have been issued by the respondent which on presentation were not honoured, he committed an offence under Section 138 of the Negotiable Instruments Act (for short “the Act”). The said findings of the learned trial Judge were upheld in appeal by Shri K. Ramakrishnan, learned Additional Sessions Judge by a judgment and order dated 17-3-2004.
9. The High Court, however, in the revision application filed by the respondent herein opined that the learned trial Judge as also the appellate court could not have rejected the evidence adduced by the respondent and in particular those of DWs 1 and 2 in view of the fact that admitted and proved facts strengthened their versions or at least probabilised the same. Holding that the respondent herein has successfully rebutted the presumption arising under Section 139 of the Act, it was held that the appellant did not succeed in proving that the respondent had borrowed any sum for which the said cheques were issued.
10. Mr B.V Deepak, learned counsel appearing on behalf of the appellant, submitted that the High Court was not correct in reversing the findings of the learned trial Judge as also the court of appeal in exercise of its revisional jurisdiction. There was no reason, the learned counsel contended, as to why a presumption in terms of Section 139 of the Act could not have been raised against the accused as admittedly the cheques were issued by him which, on presentation, were dishonoured.
11. Relationship between the parties is not in dispute. The complainant is a partner of a firm which is in the business of running chitty fund. The fact that the respondent subscribed three chitties and that he could not pay the instalments of the prized amount is not in dispute. Pendency of three civil suits filed by the firm through the appellant against the respondent is also not in dispute. The High Court upon analysing the materials brought on record by the parties had arrived at a finding of fact that in view of the conduct of the parties it would not be prudent to hold that the respondent borrowed a huge sum despite the fact that the suits had already been filed against him by the appellant. Presumption raised in terms of Section 139 of the Act is rebuttable. If, upon analysis of the evidence brought on record by the parties, in a fact situation obtaining in the instant case, a finding of fact has been arrived at by the High Court that the cheques had not been issued by the respondent in discharge of any debt, in our opinion, the view of the High Court cannot be said to be perverse warranting interference by us in exercise of our discretionary jurisdiction under Article 136 of the Constitution. The High Court was entitled to take notice of the conduct of the parties. It has been found by the High Court as of fact that the complainant did not approach the Court with clean hands. His conduct was not that of a prudent man. Why no instrument was executed although a huge sum of money was allegedly paid to the respondent was a relevant question which could be posed in the matter. It was open to the High Court to draw its own conclusion therein. Not only had no document been executed, even no interest had been charged. It would be absurd to form an opinion that despite knowing that the respondent was not even in a position to discharge his burden to pay instalments in respect of the prized amount, an advance would be made to him and that too even after institution of three civil suits. The amount advanced even did not carry any interest. If in a situation of this nature, the High Court has arrived at a finding that the respondent has discharged his burden of proof cast on him under Section 139 of the Act, no exception thereto can be taken.
12. It is now a well-settled principle of law that this Court in exercise of its jurisdiction under Article 136 of the Constitution would ordinarily not interfere with the judgment of acquittal, if two views are possible.
13. In M.S Narayana Menon v. State of Kerala (2006) 6 SCC 39 this Court held:
“54. In any event the High Court entertained an appeal treating to be an appeal against acquittal, it was in fact exercising the revisional jurisdiction. 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.”
(See also Mahadeo Laxman Sarane v. State of Maharashtra (2007) 12 SCC 705, (2007) 7 Scale 137.)
14. For the reasons aforementioned, there is no merit in these appeals which are dismissed accordingly.
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