Proper application of mind by the court is crucial for taking cognizance of the offence, and launching a prosecution under S. 138 does not prevent the complainant from approaching the civil court for recovery.

( 1 ) THIS appeal is filed challenging the acquittal of the accused in proceedings filed for prosecuting the respondent for an offence punishable under S. 138 of Negotiable Instruments Act.

( 2 ) ACCORDING to the complainant-appellant when the accused persons approached the complainant for advancement of loan, a sum of Rs. 5,50,000/- was advanced and in repayment of the said amount a cheque dated 5-12-1997 for Rs. 5,50,000/- was drawn on Syndicate Bank, Seshadripuram branch in favour of the complainant towards the discharge of the whole debt. As the said cheque was dishonoured for insufficient funds as per the bank endorsement after issuing mandatory notice dated 25-3-1998 the complainant launched the prosecution when the accused failed to pay the amount under the cheque.

( 3 ) THE respondent/accused appeared and contested the matter. The defence of the accused was there was a sale transaction pertaining to the landed properly between the complainant and one Krishnamurthy and the said deal got frustrated. Therefore, this cheque came to be issued as a security as the said sale transaction of the land was entered into between the complainant and the said Krishnamurthy at the instance of the accused persons. Therefore, the said cheque was neither issued towards legally recoverable debt or any other liability as such. They also produced certain documents ex. D1 to D3 in support of their evidence.

( 4 ) THE complainant marked 6 documents apart from leading oral evidence. The learned judge ultimately held that the entire transactions seems to be of a civil nature, therefore, it shall not dispose of the matter on merits as the parties have to resolve their disputes in Civil Court as already a suit was pending between the parties. Incidentally ii also held that the complaint was premature as the complainant did not wait till the expiry of 15th day to launch the prosecution against the accused after service of mandatory notice as contemplated under S. 138 oi the Negotiable Instruments Act. However, the learned Judge did not believe the defence raised by the accused with reference to Ex. D3 and other documents.

( 5 ) SECTION 138 was brought into Negotiable Instruments Act having regard to the peculiar nature of the problem the Mercantile World was facing. As a matter of fact at one point of time the person who gives the cheque would feel ashamed if the cheque gets bounced. We are at a stage whether the said phenomenon has become an order of the day. This probably compelled the concerned authorities to bring such a law so as to punish the drawer if the cheque issued by him is not honoured by him. This was made penal and the punishment or the sentence under the said provision is either imprisonment or by way of fine. The fine could be double the amount under the cheque.

( 6 ) THIS does not mean the creditor or the person to whom such cheque is given by the accused either towards the debt or liability foregoes his right to recover the said money in a Civil Court. The conviction under S. 138 of the Negotiable Instruments Act need not be fine alone but it could even be imprisonment. In that situation for the offence committed by the accused, he would be punished but so far as the loss caused to the complainant, he has no remedy. Therefore, mere launching of prosecution or even obtaining conviction under S. 138 against the accused does not prevent the complainant from approaching the Civil Court for recovery of the amount which is legally recoverable. Therefore, the learned Judge went on wrong footing saying as the deal was initially a land deal attracting the civil litigation, this has to be resolved in a Civil Court.

( 7 ) ANY cause of action which gives right to the party to approach the Court if under law he is entitled to prosecute, it is at his option he can do so. Merely because it opts out to proceed on the criminal side, it does not stop him from proceeding in the civil court. Section 138 of N. I. Act being a quasi civil and criminal

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