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2005(2) Bankmann 42
KERALA HIGH COURT
R. Basant, J.
M/s. Target Overseas Exports
Pvt. Ltd. — Petitioners
versus
A.M. Iqbal & Others — Respondents
Crl. R.P. No. 618 of 2004
Decided 14-2-2005

Counsel for the Parties:
For the Petitioners:Mr. Varghese C. Kuriakose, Jacob Sebastian & Praveen K. Joy, Advocates.
For the Respondents: Smt. Noorji Naushad, K.I. Abdul Rasheed, G.P.

IMPORTANT POINT
Notice under Section 138 of Negotiable Instruments Act is not an empty ritualistic formality.

Headnote:Negotiable Instruments Act, 1881—Sections 138(b), 141—Dishonour of cheque—Offence by Company—Persons entitled to notice under Section 138(b)—Going by language of proviso to Section 138(b), person entitled to notice, is the drawer and not the persons who signed the cheque on behalf of drawer.

       Facts of the case:

       (A)The question involved in this revision petition is—Whether can it be said that not only the drawer but also persons who face indictment with the help of Section 141 of Negotiable Instruments Act are entitled to notice under the second proviso to Section 138 of Negotiable Instruments Act? In the present case drawer of the cheque is the company – a juristic deemed person. The language of proviso (b) is very clear that notice in writing is to be given within 30 days to the drawer of the cheque. The second and 3rd accused who have signed the cheque on behalf of the company are not the drawers. They are only persons who have signed the cheque on behalf of the company i.e. drawer by virtue of the authority vested in them.

       (B)Accused 2 and 3 face indictment not primarily under the Section 138 of Negotiable Instruments Act. They face indictment because 1st accused has committed the offence under Section 138 and they happen to be persons incharge and responsible to the company for the conduct of its affairs. The language of Section 141 does not at all indicate suggest that such persons who face indict-ment under Section 141 are entitled to notice under Section 138(b). The Court held that where notice has been issued to the company, the drawer, the persons facing indictment with the help of Section 141 are not entitled to insist on separate notices to them.

       Result: Revision party allowed.

Order

R. Basant, J.—Is a person facing indictment under Section 141 of the Negotiable Instruments Act entitled to notice under proviso (b) to Section 138 of the Negotiable Instruments Act ? This is the question of law of importance raised in this case.

2. The revision is directed against the concurrent verdict of guilty, conviction and sentence in a prosecution under Section 138 of the Negotiable Instruments Act. The complainant alleged that the 1st accused company, to discharge a legally enforceable debt/liability to him, had issued Ext. P1 cheque for an amount of Rs. 1,78,000/-. The cheque was signed jointly by the 2nd accused, its Managing Director and the 3rd accused, another Director. The cheque, when presented for encashment, was dishonoured on the ground of ‘insufficiency of funds’. Thereupon, Ext. P5 notice of demand was issued to all the three accused. Notices issued to the 1st and 2nd accused were returned unserved. Notice issued to the 3rd accused was allegedly served on him and acknowledged under Ext. P8. There was no reply. No payment was forthcoming. It was, in these circumstances, that the complainant came to court with the complaint under Section 138 of the Negotiable Instruments Act.

3. P.W.1 was examined and Exts. P1 to P10 were marked by the complainant. The accused denied the offence alleged against them. They raised various contentions. It was contended that the cheque was not issued for the due discharge of any legally enforceable debt/liability . Signature of the 2nd accused in the cheque was disputed. It was further contended that the 2nd accused is ‘K.J. Joseph’ as shown in the complaint and not ‘Savio Joseph’ in whose name notice of demand -Ext.P5 was allegedly issued. It was further contended that there was no proper service of notice on accused Nos. 1 and 2. With the help of Ext. P8, it was contended that notice was not served on the 3rd accused as alleged. The 1st accused took up a plea of alibi. D. Ws. 1 to 4 were examined on the side of the accused. The accused relied on Exts. D1 to D3. D. W .1 is one Beckkar referred to in Ext.D1letter. It is the case of the accused that the cheque was received by the complainant under Ext. D 1 and not in the circumstances spoken to by P.W.1. D. W.3 is the 2nd accused. D.Ws. 2 and 4 were examined and Exts. D2 and D3 were marked by the defence in an attempt to contend that D.W. 2 was not available in Kerala on the date when the cheque was allegedly handed over to P .W.1, he having allegedly gone to Assam in connection with his business.

4. The courts below concurrently came to the conclusion that all the ingredients of the offence punishable under Sections 138 and 141 of the Negotiable Instruments Act have been established. Accordingly, they proceeded to pass the impugned concurrent Judgments.

5. Arguments have been advanced before me by the learned counsel for the rival contestants. The learned counsel for the petitioners assailed the impugned Judgments on various grounds.

6. Before proceeding to consider the grounds of challenge, I must alertly remind myself that the jurisdiction sought to be invoked is the one in revision. It is by now trite that a court of revision should not be interfered with the concurrent findings of fact unless such findings are grossly erroneous and result in miscarriage of justice. Thus, after reminding myself of the nature and contours of my jurisdiction in revision, the contentions raised shall be considered.

7. It is first of all contended that the cheque is not issued for the due discharge of any legally enforceable debt/liability. Even going by the case of the accused, this contention cannot succeed. They have relied on Ext. D1 which clearly shows that D. W. 1 had handed over the cheque in question to the complainant-P.W. 1. D.W. 1 is admittedly a person who acts as an agent of the 1st accused company. Ext. D1 shows that the cheque was issued by the company and acknowledged by P .W .1 as one issued for the due discharge of a lia





































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