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HIGH COURT OF KERALA AT ERNAKULAM · CRIMINAL APPELLATE JURISDICTIONREPORTABLE (CR)

Vasanthy v. State of Kerala & Anr.

2026:KER:79569 · Crl.A. No. 825 of 2015 · Decided 7 October 2026

Bench: A. Badharudeen, J.
Impugned judgment: Judgment of acquittal dated 30.04.2015 in C.C. No. 83 of 2014, Judicial First Class Magistrate Court-III, Mavelikkara
Parties: Appellant: complainant (since deceased; her son impleaded as Additional Appellant 2 on 22.08.2024). Respondents: State of Kerala, and the accused
Statutes: Negotiable Instruments Act, 1881, Ss. 118, 138, 139; Code of Criminal Procedure, 1973, Ss. 357(1)(b), 374(2)
Counsel: Sri George Varghese (Perumpallikuttiyil) for the appellant; Sri P.V. Cherian for the accused; Sri Nirmal Das P., State Brief; Sri M.A. Shihab, Public Prosecutor
Result: Appeal allowed. Acquittal set aside; accused convicted under S. 138 NI Act

Catchwords

Negotiable Instruments Act, 1881 — S. 138 — Dishonour of cheque — Acquittal on the grounds of (i) discrepancy in the place of the transaction, (ii) non-mention of the date of the loan in the complaint, and (iii) improbability of an interest-free loan — Held, unsustainable. — Initial burden of complainant — Unshaken testimony that the cheque was written and signed in the complainant’s presence is substantive evidence — Presumptions under Ss. 118 and 139 — Not rebutted — Appeal against acquittal allowed.

Short Note

In a prosecution under S. 138 of the NI Act, the complainant’s unshaken testimony on the transaction and on the mode of execution of the cheque is substantive evidence that discharges her initial burden, and it cannot be disbelieved without recorded reasons. The complaint’s silence on the date of the loan, an inference about the place of the transaction drawn without giving the complainant a chance to explain, and the fact that no interest was charged are not grounds to disbelieve her. This is particularly so where the date is proved in evidence by a bank statement, and the parties are neighbours and family friends.

Headnote

Place of the transaction: no real inconsistency. The complaint never stated where the money was lent. The Magistrate read the words “transaction took place at the residence of the complainant” in the cause-of-action paragraph as fixing the place of lending. He did so without giving the complainant an opportunity to explain what was meant by “transaction”. The defence had not put a single question to her on the place of borrowing during cross-examination. The finding of inconsistency was held not justifiable. [Para 13]
Omission of the date in the complaint is not fatal. Mere omission to state the date of borrowing in the complaint cannot, by itself, be a reason to disbelieve the complainant. Here she disclosed the date in evidence, supported by her bank statement (Ext. X1) showing a withdrawal of ₹2,00,000 on that day. [Para 14]
Interest-free lending is not improbable. The law does not prohibit lending money without interest. Persons familiar with each other may lend out of familiarity without insisting on interest, and the lender’s right to claim interest on prolonged non-payment is not barred. Lending without interest is no ground to disbelieve a complainant whose consistent case was that the parties were neighbours and family friends. [Para 14]
Initial burden discharged; presumptions not rebutted. The complainant offered herself as a witness and deposed that the accused brought the cheque, wrote it and signed it before her. That version was not shaken in cross-examination, so it is substantive evidence that discharges the initial burden. It cannot be disbelieved unless found unacceptable for reasons recorded in writing. Wilfred Jose v. Jayapal, 2026 (3) KHC 558, para 11, followed. The defence plea that the cheque was misused and reached the complainant through a third person was not supported by any evidence; that person was not examined. The presumptions under Ss. 118 and 139 therefore stood unrebutted. [Para 14]

Facts in Brief

03.01.2012The complainant alleged that she lent ₹2,12,000 to the accused, a neighbour and family friend, at the State Bank of Travancore, Kurathikad branch, in the presence of her son. On that day she withdrew ₹2,00,000 from her account.
09.12.2013When repayment was demanded, the accused issued Ext. P1 cheque for ₹2,12,000. It was dishonoured for want of funds on 10.12.2013.
18.12.2013Statutory demand notice issued and received. No payment within the statutory period; complaint filed as C.C. No. 83 of 2014.
30.04.2015The Magistrate acquitted the accused, holding that the complainant failed to prove the transaction and so could not avail the statutory presumptions.
22.08.2024The complainant having died, her son was impleaded as additional appellant.

Contentions

Appellant (complainant)

The complaint did not say the money was lent at her residence. Her consistent evidence was that it was paid at the bank on the day of withdrawal. The evidence of PW1 and PW2, Exts. P1 to P6 and Ext. X1 proved the transaction and attracted the presumptions under Ss. 118 and 139. Reliance on Wilfred Jose.

Accused and State Brief

The cause-of-action paragraph placed the transaction at her residence, contrary to her evidence. There were other inconsistencies, including the purpose of the loan, as the house construction had been completed earlier. The defence case was that a blank signed cheque given by the accused’s husband for a different transaction had been misused. Mere admission of a signature is not proof of execution. Reliance on Prameela Varghese v. Abraham Samuel, 2026 ICO 2583, and Vijay v. Laxman, 2013 (1) KHC 588.

Order

The judgment of acquittal is set aside. The accused is convicted under S. 138 of the NI Act and sentenced to simple imprisonment till the rising of the court and a fine of ₹3,45,000, with default imprisonment of six months. On realisation, ₹3,30,000 is to be paid to the complainant as compensation under S. 357(1)(b) CrPC, and the balance goes to the State towards costs. The accused is to appear before the trial court at 11.00 a.m. on 31.10.2026 to undergo the sentence and to pay the fine by that date, failing which the Magistrate is to execute the sentence. [Paras 15–17]

Cases Referred

Wilfred Jose v. Jayapal, 2026 (3) KHC 558 (followed: initial burden in S. 138 prosecutions)
Prameela Varghese v. Abraham Samuel, 2026 ICO 2583 (cited by the State Brief)
Vijay v. Laxman, 2013 (1) KHC 588 (cited by the State Brief)

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