IMPORTANT POINTS
(1) Dishonour of cheque – Criminal proceedings resulting from cheque being returned unrealised due to closure of account would be unsustainable in law and are to be quashed and set aside.
(2) Court in criminal jurisdiction would be bound by civil Court having declared cheque, subject matter of dispute, to be only for the purposes of security.

JUDGMENT :

(Sanjay Karol, J.)

Leave granted.

2. Appellant herein challenges judgment and order dated 23rd January, 2018 passed in Crl.R.P. No.1111 of 2011¹[‘Impugned Judgment’], whereby the High Court of Kerala allowed, only in part, his Revision Petition against the judgment and order of the learned Additional Sessions Judge, Thrissur,²[‘Lower Appellate Court’] dated 11th January, 2011, in Criminal Appeal No.673 of 2007, which, in turn, upheld his conviction, as handed down by the learned Judicial First Class Magistrate³[‘Trial Court’] vide order dated 14th August, 2007 in CC No.51 of 2003, under Section 138 of the Negotiable Instruments Act, 1881⁴[‘N.I. Act’].

3. The sole issue that we are required to consider is, whether, a criminal proceeding can be initiated and the accused therein held guilty with natural consequences thereof to follow, in connection with a transaction, in respect of which a decree by a competent Court of civil jurisdiction, already stands passed.

4. The facts necessary to put into perspective the issue in the present appeal are:-

4.1 The Appellant borrowed Rs.2,00,000/- from the Complainant, K.P.B Menon “Sreyes," with the promise that he would repay it on demand.

4.2 On receipt of such demand, he issued a cheque dated 30th June, 2002 for the said amount from the South Indian Bank, encashment thereof was to be through Canara Bank, Irinjalakuda Branch, to which the cheque was sent through the post with a covering letter dated 24th September, 2002.

4.3 It was dishonoured due to insufficient funds and ‘payments stopped by drawer’. The Complainant came to know of such dishonour and issued a notice of demand dated 22nd December, 2002. Accounting for no action on the part of the appellant, the complaint, the subject matter of the instant proceedings, came to be filed.

5. Equally, though, the appellant (accused) had filed Original Suit No.1338 of 2002. The five parties impleaded as defendants were, (i) K.P. Bhaskara Menon; (ii) K.P. Vipinendra Kumar⁵[2nd defendant]; (iii) Praveen Menon; (iv) The Manager South Indian Bank Limited Kathikudam, Via Koratty, Trichur; and (v) N.T. Raghunandanan. The prayers made therein were to, (a) declare cheque No.386543 of the South Indian Bank Limited, Kathikudam, as a security cheque; (b) issue mandatory injunction directing the 1st defendant to return the said cheque; and (c) issue a permanent prohibitory injunction restraining defendants 1 to 4 named hereinabove from taking any steps to encash the said cheque.

5.1 The Additional District Munsif, Irinjalakuda, decreed the Suit on 11th April, 2003 in favour of the plaintiff (accused). The Suit in respect of defendant No.4, namely the Manager, South Indian Bank, was dismissed and the Suit was wholly decreed against the remaining defendants.

5.2 Defendant No.1 filed an appeal before the Additional Subordinate Judge, Irinjalakuda in C.M.A.No.6/2006. In its judgment dated 30th January, 2007, the Court observed that “The lower court correctly analysed the facts and arrived at the right conclusion. I find no reason to interfere the order of the lower court. Hence I dismissed this appeal.”

6. Therefore, it appears from the record that the very same cheque was in issue before the Civil Court and also the Court seized of the Section 138 N.I. Act complaint.

The conclusions drawn by the Courts below, subject matter of the instant lis, are as under:

6.1 The Trial Court convicted the appellant herein to undergo simple imprisonment for one year as well as pay compensation of Rs.2 lakhs in default whereof, he was to undergo further simple imprisonment for six months. The determination of the issues, i.e., whether the decree passed by the Munsif Court would be binding on it, is of note. It was observed that a Court exercising jurisdiction on the criminal side is not subordinate to the Civil Court. Further, it was held “That order was an ex-parte order as far as criminal complaint is concerned the order of injunction issued cannot be granted and the hands o