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KERALA HIGH COURT
Hon'ble R. Basant, J.
R. Gopikuttan Pillai -Appellant
versus
Sankara Narayanan Nair -Respondent
Crl. A. No. 270 of 1997
Decided on 19.3.2003

Partial payments made by the accused after the issuance of the cheque do not absolve the liability under Section 138 of the Negotiable Instruments Act.

Headnote:

Negotiable Instruments Act - Dishonour of cheque - Section 138 - 138

Fact of the Case:

The complainant initiated a prosecution under Section 138 of the Negotiable Instruments Act against the accused for dishonour of a cheque issued for the discharge of a debt. The accused contended that the liability had been discharged through payments made after the issuance of the cheque.

Finding of the Court:

The court found that the cheque was issued for the discharge of a legally enforceable debt/liability and that the accused failed to prove complete discharge of the liability prior to the receipt of the notice of demand.

Issues: The issues revolved around the issuance of the cheque, the alleged payments made by the accused, and the applicability of Section 138 of the Negotiable Instruments Act.

Ratio Decidendi: The court held that partial payments made by the accused after the issuance of the cheque did not absolve him of liability under Section 138. The court also interpreted the statutory provision to include the amount already paid towards the liability in determining the offence under Section 138.

Final Decision: The court allowed the appeal, convicted the accused under Section 138, and directed payment of compensation and expenses.

JUDGMENT

R. Basant, J. : The complainant is the appellant. The prosecution initiated by him against the accused under Section 138 of the Negotiable Instruments Act ended in acquittal. He assails the said judgment.

2. The complainant alleged that Ext. P1 cheque for Rs. 72,750/- was issued by the accused to him for the due discharge of a legally enforceable debt/liability. The said cheque when presented was dishonoured by the Bank on the ground of insufficiency of funds. Notice of demand was issued. Payment was not effected as demanded. It was in these circumstances that the complainant came to Court with this prosecution under Section 138 of the Negotiable Instruments Act.

3. The accused denied the offence alleged against him and thereupon the prosecution examined PWs 1 to 4 and proved Exts P1 to P4. PW 1 is the complainant. PW 2 is the Manager of the drawee Bank. PWs 3 and 4 are examined to prove the transaction, and to explain the entries in Exts. D 1 and D2.

4. The accused did not dispute the fact that the cheque was issued by him to the complainant. It was admitted that an amount of Rs. 60,000/- was advanced by the complainant for repair of the vehicle of the accused. It was also conceded that there was a stipulation that interest will be payable on the said loan amount of Rs. 60,000/-. It is to discharge this liability of Rs. 60,000 and interest that Ext.P1 cheque was issued by the accused to the complainant. On that aspect there was no dispute. No dispute is raised before me also on that aspect.

5. What then is the defence of the accused? The accused contended that though Ext. P1 cheque was handed over, amounts were paid after the issue of Ext.P 1 cheque in pursuance of an understanding towards the liability under Ext.Pl cheque. According to the accused Exts. D 1 and D2 kurippu books evidence repayment made by him in instalments towards the liability under Ext. Pl. These kurippu books Exts. D1 and D2 contain the acknowledgements in the hand of the complainant from time to time. It is also admitted before me that the total amount paid and acknowledged under Exts. D 1 and D2 would not exceed Rs. 46,000/= [Rs.45,63 1/- (Rupees forty-five thousand six hundred and thirty-one only) to be exact]. The accused has a further contention that Ext. D3 series also show that amounts were paid to the complainant out of the profits made by running the bus. It is the case of the accused that a total amount of about Rs. 79,260/- had been paid under Ext. D3 series also. Admittedly there is no acknowledgement of the complainant in Ext. D3 series. On the side of the accused DW1 was examined. Exts. D1 to D4 were also marked.

6. The learned Magistrate on an anxious consideration of all the relevant inputs came to the conclusion that the complainant has not established his case beyond doubt. To be specific the learned Magistrate came to the conclusion that there is no convincing evidence to show that the cheque was issued for the discharge of any legally enforceable debt/liability. The liability if any has been discharged under Exts. D 1 to D3, it was held by the learned Magistrate. The complainant had not satisfactorily explained Exts. D1 and D2 payments which are admitted by him, opined the learned Magistrate. Accordingly the learned Magistrate proceeded to pass the impugned judgment of acquittal.

7. Before me the learned Counsel for the complainant/appellant and respondent/accused have advanced their arguments. The learned Counsel for the appellant-complainant contends that the learned Magistrate did err grossly in conceding the benefit of doubt to the accused. The learned Magistrate did not correctly appreciate the play of the presumption under Section 139 of the Negotiable Instruments Act as also the burden on the accused to prove his plea of discharge in a prosecution under Section 138.

8. The issue of Ext. P1 cheque is admitted. We have the evidence of PW 1 about the circumstances under which Ext. P 1 cheque found its way from the possessi
























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