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Kerala High Court
Hon'ble M. R. Hariharan Nair, J.
C.R.A. No. 488 of 1998
Decided on 11.7.2002
Joseph Jose
versus
J. Baby & Anr.
The burden to prove non-tender of the article was on the accused, and the court emphasized the presumptions available under Sections 118 and 139 of the N.I. Act.
Headnote:
Section 138 - Dishonour of cheque - The court found the acquittal of the accused unjustified as the complainant had established the dishonour of the cheque, issuance of notice, and the return of the notice with the endorsement 'unclaimed', which was considered as refusal. The court emphasized that the burden to prove non-tender of the article was on the accused and highlighted the presumptions available under Sections 118 and 139 of the N.I. Act.
Fact of the Case:
The complainant alleged that the accused issued a cheque that was dishonoured for want of funds and that the notice sent to the accused was returned unserved with the endorsement 'unclaimed'. The appellant challenged the acquittal of the accused.
Finding of the Court:
The court found the acquittal of the accused unjustified and set aside the impugned judgment, remitting the matter to the Trial Court for passing a fresh judgment.
Issues: (1) Whether the complainant has established the offence under Section 138 of the N.I. Act? (2) Reliefs?
Ratio Decidendi: The burden to prove non-tender of the article was on the accused. The court emphasized the presumptions available under Sections 118 and 139 of the N.I. Act and highlighted that the acquittal of the accused was unjustified.
Final Decision: The impugned judgment was set aside, and the matter was remitted to the Trial Court for passing a fresh judgment.
Key Points:- [6000031500008] The endorsement "unclaimed" can be taken as refusal and suffices for compliance with Section 138(b) of the NI Act; burden to prove non-tender of the article is on the accused.[6000031500008]- [6000031500009] Under Section 118(a), there is a presumption that the cheque was issued for consideration and on the date; under Section 139, there is a presumption that the cheque was issued to discharge debt or liability in the absence of contrary evidence; acquittal unjustified.[6000031500009]- (!) The main issues are whether the complainant established the offence under Section 138 NI Act and related reliefs. (!) - (!) The complainant provided evidence of dishonour, notice, and return with endorsement; argued that non-tender burden lay on accused.[6000031500008]- [6000031500010] The impugned judgment is set aside and remitted for fresh judgment.[6000031500010]- (!) The challenge concerns acquittal of the accused in a complaint alleging offence under Section 138 NI Act. (!) - [6000031500001] Details of loan, cheque date, dishonour, and notice given.[6000031500001]- [6000031500007] The complainant need not allege full transaction details; essential is issuance of cheque to discharge debt or liability.[6000031500007]- [6000031500004] Points for decision include whether the complainant established the offence and reliefs.[6000031500004]
What is the standard for proving non-tender of the article under Section 138 of the NI Act?What is the effect of an unserved or unclaimed notice on the validity of a Section 138 NI Act prosecution?What is the proper remedy when there is acquittal under Section 138 NI Act but the appellate court finds the acquittal unjustified?
M. R. Hariharn Nair, J. : The challenge in the appeal is with regard to the acquittal of the accused in the complaint filed by the appellant alleging offence under Section 138 of N.I. Act against the first respondent herein.
2. The complainant alleged that on receipt of a sum of Rs. 85,000/- from him as loan, the first respondent issued Ext. P1 cheque on 3.9.1996; that the cheque, on presentation, was dishonoured for want of funds vide Exts. P2 and P3; that he sent Ext. P4 notice intimating the dishonour and demanding payment and that Ext. P5 is the envelope whereby the notice was returned. He also stated in his evidence as PW 1 that Ext. P5 was returned without acceptance deliberately and that the complainant had even intimated the fact of dishonour of the cheque to the accused in person.
3. According to the learned Counsel for the appellant the acquittal of the accused as per impugned judgment is for trivial and untenable reasons.
4. According to the respondent, as long as the postman remains unexamined, refusal to accept Ext. P4 notice cannot be inferred. He would urge that the burden in the matter lay with the complainant.
5. On the arguments advanced in the case, the points that arise for decision are:
(1) Whether the complainant has established the offence under Section 138 of the N.I. Act?
(2) Reliefs?
6. Point No.1: A perusal of the impugned order shows that the reasons for the rejection of the complainant's case are the following:
(i) In the complaint he failed to divulge the date on which the amount was lent to the accused; the purpose of loan and the date of advancement of the amounts.
(ii) According to PW1, the accused demanded the loan amount for starting a business with his friend, However, the name of the particular friend is not let known to the complainant and as such the probability of the loan transaction is remote.
7. I am in full agreement with the Counsel for the appellant that the reasons given in the impugned judgment are totally insufficient to reject the case of the complainant. The learned Magistrate has thoroughly misconceived the scope of the jurisdiction under Section 138 and impugned the presumptions available under Sections 118 and 139 of the N.I. Act.
8. In a complaint of the present nature it is not necessary for the complainant to allege the details of the original transaction. He need mention only the fact that the issuance of the cheque was to discharge in whole, or in part, any debt or other legal liability. A perusal of the complaint shows that in paragraph 1, it was specifically alleged that the cheque was issued by the accused for a sum of Rs. 85,000/- on 3.9.1996 towards the debt arising from borrowal of Rs. 85,000/- from the complainant. In his evidence when the specific date was asked for, he stated that according to his money the loan transaction took place on 4.7.1996. In a case of the present nature where in the answer to the questions under Section 313 or even in the cross-examination of the complainant, there was no case at all for the accused that he had not issued the cheque or that it was issued not in discharge of any legal liability, there was absolutely no justification for discarding the complainant's case on the ground of improbability of the original transaction or want of pleadings in that regard. The purpose behind the incorporation of Section 138 of the N.I. Act is to lend credibility for cheque transactions. For establishing the requirements in Section 138, there is no burden on the part of the complainant to prove before Court the entire details of the transaction resulting in issuance of cheque.
9. The complainant has produced before Court the required documents to show that the cheque was dishonoured for want of funds; that notice thereof was issued within the time allowed by law and that the notice sent to the accused was returned unserved with the endorsement "unclaimed". It is clear from the decision in Bhaskaran v. Balan, 1999(3) KLT 440, that the en
